Consumption Versus Expenditure

Posted: 15 Sep 2005

See all articles by Mark Aguiar

Mark Aguiar

Princeton University

Erik Hurst

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)


Previous authors have documented a dramatic decline in food expenditures at the time of retirement. We show that this is matched by an equally dramatic rise in time spent shopping for and preparing meals. Using a novel data set that collects detailed food diaries for a large cross section of U.S. households, we show that neither the quality nor the quantity of food intake deteriorates with retirement status. We also show that unemployed households experience a decline in food expenditure and food consumption commensurate with the impact of job displacement on permanent income. These results highlight how direct measures of consumption distinguish between anticipated and unanticipated shocks to income whereas measures of expenditures obscure the distinction.

Suggested Citation

Aguiar, Mark and Hurst, Erik, Consumption Versus Expenditure. Journal of Political Economy, Vol. 113, pp. 919-948, October 2005, Available at SSRN:

Mark Aguiar

Princeton University ( email )

Princeton, NJ 08544-1021
United States

Erik Hurst (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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