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Life-cycle expenditure and retirees’ cost of living

Author

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  • Rodrigo Lluberas

    (Banco Central del Uruguay)

Abstract

The aim of this paper is threefold. First, we document the expenditure life-cycle profile in the United Kingdom and show how differences in the consumption bundle of pensioners and workers translates into different inflation experiences. Albeit differences in given years, the inflation experienced by the two groups is not significantly different over a long time period. Secondly, we estimate a demand system and compute the change in the cost of living and the substitution effect for both pensioners and workers for the period 1990-2009. Finally, we show how pension income would evolve during that period under three alternative indexation measures. Adjusting pension income by the RPI results in a higher income than adjusting by the cost of living index or household inflation

Suggested Citation

  • Rodrigo Lluberas, 2013. "Life-cycle expenditure and retirees’ cost of living," Documentos de trabajo 2013007, Banco Central del Uruguay.
    • Handle: RePEc:bku:doctra:2013007
    as

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    File URL: https://www.bcu.gub.uy/Estadisticas-e-Indicadores/Documentos%20de%20Trabajo/7.2013.pdf
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    References listed on IDEAS

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    Cited by:

    1. Rodrigo Lluberas, 2019. "Pension Income Indexation: A Mean-Variance Approach," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2019), pages 33-59, October.
    2. Eren Gürer & Alfons J. Weichenrieder, 2021. "Pro-rich Inflation and Optimal Income Taxation," Public Finance Review, , vol. 49(6), pages 815-844, November.

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    More about this item

    Keywords

    consumer demand; cost of living; pension income indexation;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D60 - Microeconomics - - Welfare Economics - - - General

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