Effect of ageing on the ownership of durable goods

Abstract

I analyse how ageing affects the demand for non‐housing durable goods. Based on the English Longitudinal Study of Ageing, individual characteristics, cohort and time effects can explain most of the age variation in the ownership and purchase of durable goods. A life‐cycle model is derived to capture the complex relation between ageing and the demand for non‐housing durable goods. Decreasing survival probability, deteriorating health and changing preferences are jointly reflected in the age gradient of demand. Simulations indicate that higher chances of survival increase the ownership ratio of the durable items.