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Job Market Paper

Are Millennials Spoiled Kids? Age and Generation Effects on Luxury Expenditure

Most Inspirational Conference Paper Award, European Academy of Management (EURAM) 2021 Conference, June 2021

Millennials have attracted attention in marketing research because they spend a higher share of their expenses on luxury goods than any preceding generation. However, it remains unclear to which extent this is explained by their young age. In this paper, I study the influence of age and generation effects on luxury expenditure. Using panel data on consumption behavior from the US, I separately identify age and generation effects on luxury expenditure using a variety of different approaches. First, I estimate panel regression models including a full set of age and generation dummies plus a long list of other demographic characteristics. Next, I leverage tools from supervised machine learning, which allow for flexibly non-linear and interactive relationships between the variables. All approaches consistently show that, conditional on age and other demographics, Millennials spend less on luxury goods than the preceding generations, both in absolute terms and as a share of total expenditure. The high luxury expenditure of Millennials observed in the cross section can be fully attributed to their young age. These results challenge the conventional view of Millennials as a spoiled generation indulging in luxury.

Working Papers

Restrictive Fertility Policy and Elderly Suicides: Evidence from China (with Uwe Sunde)

This paper presents an empirical investigation of the hypothesis that exposure to the restrictive fertility policies of the Chinese “Later, Longer, Fewer” campaign in the 1970s contributes to the dynamics and patterns of elderly suicides in China in the period 2004 – 2017. We apply an identification strategy that exploits variation in exposure to this policy across birth cohorts, time and space that is based on the quasi-random timing of the implementation of the fertility policies across Chinese provinces. The results show that cohorts with a greater exposure to the restrictive fertility policy in the 1970s exhibit higher suicide rates during old ages.

Work in Progress

Consumer Revolution, Intercontinental Trade, and Economic Growth (with Uwe Sunde)

This paper develops a theoretical framework to explain consumer revolution in early modern Europe and the subsequent economic growth from the demand side of the economy.