Insights on Economic Well-Being at Older Ages from Analyses of Household Spending

Abstract Consumption is a direct measure of individuals’ economic well-being, and is therefore the core argument in economic models. Following a brief overview of life-cycle models of consumption, this chapter presents empirical evidence about longitudinal spending patterns at older ages. The authors show how spending changes at common retirement ages, the evolution of spending over the remainder of the life cycle, shifts in the composition of spending with age, and how these patterns vary by demographic characteristics. The chapter uses spending data to learn about economic well-being, poverty status, and economic preparation for retirement. The authors conclude with a discussion of avenues for future research.