How does death of a household member affect consumption? The Case of Mexico
|Author:||Mgr. Marek Šedivý|
|Year:||2019 - summer|
|Leaders:|| doc. PhDr. Julie Chytilová Ph.D.
|Work type:|| Economic Theory
|Awards and prizes:|
|Abstract:||In this thesis, we study the effect of death of a household member on the evolution of household
per capita consumption. We provide multiple contributions to the available literature. We are
the first to analyze all three waves of the Mexican Family Life Survey and use them to estimate
the effect of within-household mortality on consumption. Furthermore, we assess to what extent
this effect depends on the characteristics of the deceased household member. We also provide
evidence on the persistence of the shock into consumption. We rely on a fixed-effects model.
We find that households are capable of perfectly smoothing shocks into consumption caused
by within-household mortality. However, we find evidence indicating that the effect of withinhousehold mortality on consumption is likely to depend on the characteristics of the affected
household. We consider multiple robustness checks. Based on these we conclude that our
findings are robust against variations in the specification of our model.