Study: Consumption patterns among aging Canadians

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Canadians in their early 70s saw their income fall during their retirement years. However, they were able to continue to spend nearly as much on goods and services as they did in their late 40s.

After taking the declining size of families into account, this study found that a group of households headed by individuals aged 71 to 74 in 2008 spent 5% less on goods and services than a similar group in its late 40s in 1982. Over the same period, average household income declined by about 16%.

Spending on goods and services includes all items that meet the consumption needs of household members, but excludes gifts and charitable contributions, pension plan contributions, insurance premiums, taxes and savings.

Although total spending on goods and services changed little as households aged, their consumption patterns did change.

When household heads were in their late 40s, more than one-third of their consumption dollars went to food, clothing, personal care and health care. Just over 30% was spent on residence and properties, while transportation and other consumption (including leisure) accounted for 16% and 18% respectively.

As households aged, the proportion they spent on residence and properties rose to 43%. The proportion spent on health care doubled from 3% for younger households to 6% for older households.

The proportion spent on food, clothing and personal care fell to 28%. Older households also spent less on other consumption items: tobacco and alcohol, and "miscellaneous" items comprising administrative and financial fees, membership dues and service charges. Transportation expenses remained relatively stable over the period, consistently accounting for between 16% and 19% of total consumption.

Note: This article studied the evolution of spending on goods and services (consumption) of a cohort of households headed by individuals born in the mid-1930s. Data came from the Survey of Family Expenditures and the Survey of Household Spending. Given the absence of longitudinal consumption data, this study used a synthetic cohort approach. This approach assumes that households with a head aged from 71 to 74 years in a survey collected in 2008 are representative of households headed by 45- to 48-year-olds in a similarly designed survey in 1982.

Consumption per adult is measured as consumption divided by the square root of the number of people in the household to account for economies of scale and changes in household size over time.

Definitions, data sources and methods: survey numbers, including related surveys, 3504 and 3508.

The article "Consumption patterns among aging Canadians" is now available in the March 2011 online edition of Perspectives on Labour and Income, Vol. 23, no. 2 (75-001-X, free), from the Key resource module of our website under Publications. A detailed report is also available online, under the same module, as part of the Economic Analysis Research Paper Series (11F0027M2011067, free).

For more information, or to enquire about the concepts, methods or data quality of this article, contact Amélie Lafrance (613-951-0060; amelie.lafrance@statcan.gc.ca), Economic Analysis Division, or Sébastien LaRochelle-Côté (613-951-0803; sebastien.larochelle-cote@statcan.gc.ca), Labour Statistics Division.