Measure Dependent Ratio in Consumptions with Household Type Heterogeneity

Yuan Cheng, Fudan University
Xuehui Han, Asian Development Bank (ADB)

In this paper, we contribute to the literature in three aspects: (1) we adjust the traditional dependent ratio in a way to accommodate the economic measures: consumption and income. To improve this measure by incorporating the consumption expenditure of young and old people into the numerator and the income of labor force people into the denominator. We find the expenditure and income adjusted ratio is much lower. (2) To advance our understanding consumption pattern variations across different age group, we employ a linear regression equation to decompose the household expenditure to different age group members. We find the old people consume much less than labor force population. However, the aged old who live with their offspring consume no less than the younger old do. (3) We find for the households with young members, the grandparent generation presence does help reducing the consumption of young member within that household.