Dundee Discussion Papers in Economics 186: Estimating the effect of projected household composition change on production in Scotland

In this paper attention is directed at the effects of the ageing of the Scottish population. Expenditure patterns vary with the average age of household members Data from Family Spending is used to disaggregate the household column of the Scottish input-output table into three sub-sectors (a) Younger households (Age of head of household less than 65), (b) Mature households (Age of head of household between 65 and 74) and (c) Older households (Age of head of household 75 or more). A comparison of the published Type II multipliers with those using the disaggregated household sector is made. The second part of the paper uses household projections produced by the Registrar General for Scotland to forecast the relative changes that might be expected (ceteris paribus) in the three household expenditure columns. Alterations in the relative frequency of each type of household will have implications for individual industries. Holding total income constant, an increase in older households and a decrease in younger households would increase final demand for some commodities and lower it for others. Given the implicit multiplier effects, the industries that are relatively advantaged by the demographic change are identified.