Document Type

Working Paper

Publication Date

6-2015

JEL Codes

E31, J14

Working Paper Number

2015-03

Abstract

We use shifts in food Engel curves among the U.S. elderly to estimate the extent of Consumer Price Index (CPI) bias specific to this population. Over the last thirty years the share of total expenditure devoted to food has declined more rapidly for elderly-headed households than for other households. This decline is not explained by a more rapid increase in measured total expenditure for the elderly, or by relative change in other covariates such as household composition. We present this as evidence that the true cost of living increased more slowly for the elderly than for the nonelderly over this period, in contrast to conventional wisdom that the elderly face a higher inflation rate.

Included in

Economics Commons

Share

COinS