[Journal:] Swiss Journal of Economics and Statistics [ISSN:] 2235-6282 [Volume:] 153 [Year:] 2017 [Issue:] 4 [Pages:] 371-401
Widowhood and retirement change the economie environment of elderly households. While retirement changes income and expenditure patterns, widowhood fundamentally changes the structure of the household. Besides high non-monetary cost of losing the partner, resources are no longer shared and economies of scale arising from joint consumption are lost. This paper applies a collective household model to expenditure data on elderly households in Switzerland. The findings suggest that 44% of household resources are assigned to wives and both spouses save roughly 27% or, on average, 800 Swiss Francs on monthly expenditures relative to living apart. Estimates of indifference scales indicate that men suffer a financial loss after losing their wife, while widowed women do not.
Collective household model indifference scale resource shares economies of scale in consumption Engel curves elderly households