1- Department of Economics, Faculty of Administrative Sciences and Economics, Vali-e-Asr University, Rafsanjan , M.Ansarinasab@vru.ac.ir
2- International economics, Department of Economics, Faculty of Management and Economics, Shahid Bahonar University of Kerman
2- International economics, Department of Economics, Faculty of Management and Economics, Shahid Bahonar University of Kerman
Abstract: (1196 Views)
Two key concepts in microeconomic theory and economic development are consumption and income. On the other hand, the age structure of the population is an important and effective factor in the formation of national savings and consumption. In this regard, this research examines the dynamics of the effect of population structure on life cycle consumption (testing Modigliani's hypothesis). In order to investigate the effect of the share of young and old people on the average desire to consume in Iran in the period from 1960 to 2021, the Markov switching model has been used. The results of this model are as follows: per capita income in both regimes had a negative effect on consumption share of income (APC). In the regime, a positive and significant relationship between the variable of population growth and the consumption share of income has been observed, but this relationship is estimated to be negative and insignificant in the regime. The age share variable (below 14 years) has a negative and insignificant effect on the consumption share of income in both regimes. The age share variable (over 64 years old) has had a negative and insignificant effect in the regime of one (high consumption) and a positive and significant effect in the regime of two (low consumption) on the consumption share of income. The results of this study clearly show that the share of non-working age has a positive effect on the consumption share of income. Therefore, considering the positive effect of income and population growth in increasing consumption, it is recommended that the country's macroeconomic policy makers pay special attention to these two variables in the country's macro planning. Also, since the results showed that the age share variable (below 14 years) did not have a significant effect on consumption, but the age share (above 64 years) had a negative and significant effect on consumption in Iran.
Keywords: Age Share Under 14 Years, Age Share above 64 Years, Life Cycle Consumption, Markov Switching Model, Dynamics.
Type of Study: Research |
Subject:
human force and population economics
Received: Nov 04 2024 | Accepted: Aug 02 2025
Received: Nov 04 2024 | Accepted: Aug 02 2025
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