The Retirement-Consumption Puzzle: Theory and Empirical Evidence on Food Production and Food Consumption with Time Budget Data

Abstract

The remainder of the present work is organised as follows: two theories of consumption behaviour – the Life-Cycle Hypothesis and the Theory of Household Production – are studied in the next chapter, in order to lay theoretical foundations for the understanding of the empirical application of these theories. More precisely, Chapter 3 describes the so-called Retirement-Consumption Puzzle, which arose from the empirical testing of the Life-Cycle Hypothesis. One of the most recent explanatory approaches to the solving of this puzzle is the Theory of Household Production. As mentioned above, evidence for Germany is scarce. This constitutes the motivation for the realisation of the empirical analysis presented in Chapter 4. Here, the time use for food production at home, food consumption at home and food consumption away from home is studied for German households. The German 2001/02 Time Use Survey, which is described in the first part of Chapter 4, is the database employed. Then, the extensive process of data preparation is explained in detail. Subsequently, problems associated with the data and the solution of these is discussed. Herewith, the data processing is concluded and a descriptive analysis of time use for food production and consumption by various determinants is provided. It is followed by the regression analyses which have the objective of providing an answer to the following research question: What impact does retirement have on the time use for food production at home, food consumption at home and food consumption away from home of German households? The results are interpreted and discussed in the last section of Chapter 4.