Consumption responses to inheritances: The role of durable goods

Belloc, Ignacio (Universidad de Zaragoza) ; Molina, José Alberto (Universidad de Zaragoza) ; Velilla, Jorge (Universidad de Zaragoza)

Resumen: This paper studies the impact of inheritances, a key component in household wealth accumulation, on consumption. Specifically, we investigate how inheritances influence household consumption
growth, distinguishing durable and nondurable goods. In doing so, we use data from the Panel Study of Income Dynamics spanning 2005–2019. The results reveal a positive effect of
inheritances on household consumption of durable goods. Such an effect occurs immediately after receiving the inheritance and its average magnitude is about 27 %. Estimates also reveal that
large inheritances significantly impact the consumption growth of durables, but also of nondurables, while small inheritances show no effects. Consumption responses are stronger among
liquidity and borrowing constrained households, aligning with life-cycle models of consumption behavior. Insights inform planners by highlighting varied effects of inheritances on household
consumption, particularly emphasizing the nuanced impact of inheritance size.

Idioma: Inglés

DOI: 10.1016/j.jmacro.2024.103661

Año: 2025

Publicado en: JOURNAL OF MACROECONOMICS 83 (2025), 103661 [16 pp.]
ISSN: 0164-0704

Financiación: info:eu-repo/grantAgreement/ES/DGA/S32-23R

Tipo y forma: Article (Published version)

Área (Departamento): Área Fund. Análisis Económico (Dpto. Análisis Económico)