A Comparison of the Poverty and the Consumption Between Poor and Non-poor Elderly Households

Abstract

Background/Objectives: Our study examines poverty ratios, characteristics of expenditure trends, determinants of both total expenditure and individual expenditure items of poor households and non-poor households among elderly households. Methods/Statistical Analysis: We use the 1st–4th Korean Retirement and Income Study as a biannual panel data, and calculate the poverty rate, which is the ratio of the number of people (in a given age group) whose income falls below the poverty line of the total population. Also we compare poor elderly households with non-poor elderly households by estimation results of a regression model. Findings: Total expenses in poor elderly households are half as much as those of non-poor households. The income increase in non-poor households shows remarkable marginal effects on consumption expenditure, but poor households do not show a statistical significance except for food, housing and utilities. Marginal effects for necessary goods in poor households are bigger than those for non- necessary goods. On the other hand, marginal effects for clothing, transportation /communication, culture and health goods in non-poor households are bigger than those for non-necessary goods. Application/Improvements: Empirical results say that it is desirable to convert ongoing integrated benefit into individual benefit in the minimum living system in the near future.