Effect of Ageing on Household Demand for Clothing, Food, Housing, and Medical Care Commodities in Korea

Abstract

This study investigates to investigate the ageing effect on household demand for clothing, food, housing and medical care commodities in Korea using a demand system model. The cross-sectional and time-series data from Statistics Korea on urban household expenditures and age projection analyzed household demands of consumption commodities. The household head age and elderly population ratio were employed for proxy variables of ageing. Ageing variable elasticities of commodity demands were estimated. Study results show that ageing variables significantly influenced on a household demand for commodities; clothing and food consumption decreases; however, housing and medical care consumption increases with ageing. The elasticities of total consumption expenditures and price variables were estimated in the demand analysis; these two variables significantly impacted almost all of the household consumption for the studied commodities. This study provides an opportunity to examine how ageing influences household consumption for clothing, food, housing and medical care commodities as Korean society experiences a rapid ageing. It is also meaningful that this study conducted a quantitative measuring of the household demands for commodities that was different from past research on the household consumption expenditures for commodities. Keywords: ageing, household, demand, consumption, elasticity