Research article review: Mortality Shocks and Survivors’ Consumption Growth
The main issue discussed in this article is the relationship between mortality and consumption of resources. The main relationship discussed is that the incidence of mortality causes family income and the available resources to reduce. This relationship was at looked from different angles and the effect of mortality on consumption and saving habits were analyzed.
According to Grimm (2010), households that lost a family member adopted some coping mechanism depending on the status of the deceased family member. Some of the coping mechanisms for mortality in a household include reduced consumption, consumption of ...view middle of the document...
Most of the studies concluded that, …”Except in the case of severe illnesses, households manage to cover costs fairly well on average” (Grimm, 2010, p.147). The author also compares his stance that mortality has a negative effect on household income and resources with the economic point of view that mortality leads to reduction of family size. This reduction in family size implies that there are more units of consumption per surviving person. This also depends largely on how much the deceased family member used to consume.
The qualitative format of research was used to gather the data used in this article. Data was gotten from the Indonesian Family Life Survey (IFLS). “The IFLS is an ongoing longitudinal socioeconomic and health survey”(Grimm, 2010, p. 149) that is based on the life of Indonesian families. The families in the survey were mostly middle- and low-income families. These families were interviewed and basic detailed information was collected. The kind of data gotten from these families includes employment, expenditure, socio-demographic structure of the family, monetary and non-monetary assets, as well as transfers received and made (Grimm, 2010). These interviews were conducted in three years, 1993, 1997 and 2000. The same families from the 1993 interview were contacted again in 1997 and 2000, and those had relocated were tracked and re-interviewed, where possible. The equivalence of an adult’s consumption was calculated from the data retrieved and the following formula was used
Adult Equivalent Consumption (AEC)=(household consumption)/(adult+0.5*children)^0.9
Where children is from age 0-15
And household consumption in each year is expressed in the prices of 1993 and adjusted by regional price deflators.
In each year, the families were asked to record something specific to their family especially negative or economic shocks faced, the measures they had taken towards such shocks and an estimate of the total cost involved in such shocks. For example, in 2000 they were asked the measures they had taken in the occurrence of negative shock and the direct cost involved if the shock was death of a family member. The costs were broken down based on who had died, i.e. a child, a male adult, a female adult or an elderly individual. The data retrieved showed that the costs were lower in the event of the death of s child, followed by that of a female and an elderly. The costs were highest in the death of an adult male. This is because most adult males are income earners in a household. Households viewed the death of a family member to have a significant reduction of total family income (Grimm, 2010).
The impact of mortality on household consumption was also considered. The data showed that based on their consumption prior to their death, the consumption per person following their death would be significantly higher or lower. Such a data would be specific for each family but on the average (data from...