Differences in Consumer Climate by Age, Income, and Household Type

Abstract:

This study examines systematic differences in the consumer climate and its components among private households in Germany across three sociodemographic dimensions: age, income, and household type. Based on microdata from the NIM Consumer Climate Survey, we show that younger people, high-income individuals, and family households have more optimistic consumption expectations than older people, low-income individuals, and retiree households.  These findings partially explain why the consumer climate has been continuously declining for years due to structural changes caused by demographic shifts. The results also show that differences between sociodemographic groups have shifted significantly during the period of high inflation. For example, it was only with the onset of high inflation that differences in willingness to save emerged across various income groups. Existing theories and empirical findings can only partially explain these findings. The discussion section examines policy relief packages that may address these structural shifts. The results clearly demonstrate that sociodemographic differences in the consumer climate can facilitate our understanding and inform the design of fiscal and social policy measures in an aging society.