The Determinants of Consumption of 50+ Population in Croatia

The aim of this paper is to explore the basic featu res of consumption of 50+ population in Croatia by using the data from Survey of Health, Ageing, and Retirement in Europe – SHARE (SHARE, 2017). Thereby w e use an extended model of consumption that includes basic consumption dete rminants that are stipulated by the economic theory and empirical research, name ly income and wealth which are retrieved from SHARE database and augment it wi h other economic and socio-demographic features of „50+“ population that may exhibit an influence on consumption decisions. In order to model ho usehold consumption, we use ordinary least squares (OLS) method when estima ting the baseline regression equation. Additionally, control variables labo ur status, gender and marital status are used in order to explore whether the hou sehold consumption is more responsive to changes in household income and wealt h for specific groups of respondents. The results of the analysis indicate t hat retired individuals have higher marginal propensity to consume compared to t he employed individuals, which is in line with the life-cycle theory.