Does Retirement Reduce Household Food Consumption Expenditure in Cameroon?

Abstract

The objective of this article is to investigate the effect of retirement on household food consumption expenditure in Cameroon. We use a fuzzy regression-discontinuity method to identify the effect of retirement on household food consumption expenditure. We estimate the retirement equation and instrumental equation with food consumption expenditure equations in a two-stage least squares framework. Our data come from the Fourth Household Survey (ECAM4) organized in Cameroon by the National Institute of Statistics in 2014. The results confirm the existence of the retirement-consumption puzzle in the case of food expenditure and restaurant and hotel expenditure. Food expenditure falls in retirement by 55.6 percentage points and spending on restaurants and hotels falls by 65 percentage points, reflecting the precariousness of the pension system in Cameroon. In the case of beverage expenditure, on the contrary, we observe an increase in alcohol expenditure in retirement.