Consumption versus Expenditure

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Abstract
Previous authors have documented a dramatic decline in food ex- penditures at the time of retirement. We show that this is matched by an equally dramatic rise in time spent shopping for and preparing meals. Using a novel data set that collects detailed food diaries for a large cross section of U.S. households, we show that neither the quality nor the quantity of food intake deteriorates with retirement status. We also show that unemployed households experience a decline in food expenditure and food consumption commensurate with the im- pact of job displacement on permanent income. These results high- light how direct measures of consumption distinguish between antic- ipated and unanticipated shocks to income whereas measures of expenditures obscure the distinction.