Geoscience Reference
In-Depth Information
demand by households. The AIDS system equations that are to be included are
derived from estimates using a 20-year time series (1984-2003) in the final demand
equations (see Yoon and Hewings (
2006
) for details of the integration).
Although international (legal and illegal) immigration is an increasingly impor-
tant component of national population change, the region's demographic structure
is determined by the combination of natural increase (births-deaths), and two types
of migration, international and interregional.
The next sections of this paper describe some of the analyses that have been
conducted to explore various aspects of the synergies presented in Fig.
11.1
. The
outcomes provide a mix of results that meet a priori expectations, produce some
surprises and also create outcomes whose impacts depend on the time period
chosen.
11.2.3 Applications: Population Composition and Changes Time
Given, the potential changes generated by the ageing phenomenon noted in
Fig.
11.2
, how does this translate into demonstrable economic impacts? Figure
11.3
revealed the expected consumption by six age groups in comparison to aggregating
the effects into a single household type. The evidence suggests that it is important to
pay attention to age if for no other reason than changes in the rate of growth by age
are so different. However, it is not just the rate of growth but also differences in
consumption patterns as revealed in Fig.
11.4
for a sample of goods and services.
Here, we find some important differences in the way households allocate
income; the figures show how a typical dollar is divided among a sample of
goods and services. For example, on average in 2003, households allocated almost
13 % of their income for food, 36 % for housing (including mortgage, other loans,
maintenance expenditures etc.) and 17 % for all forms of transportation. The food
expenditure allocation varied from 12.4 % (45-54 age group) to 14.5 % (under 25)
while the transportation allocations varied from 18.1 (under 25) to 14.7 (over 65).
Over time, many of these expenditures are forecast to change. For example, people
over 65 will spend a declining share of their income on food but an increasing share
on other goods and services that include restaurants.
The health care allocations generate some interesting outcomes; while all age
groups will experience an increase in the share of income allocated to health care,
the greatest increases occur not in the over 65 age group but in the other age groups,
increasing from 3.9 to 5.9 % (35-44), from 4.4 to 5.9 % (44-54) and 6.2 to 8.1 %
(55-64). Since income usually follows a growth path that peaks in middle to
pre-retirement, the implication here is that not only will a larger share of income
go towards health care but the volume of expenditures on health care will increase
as well.
For the Chicago economy, these results have important implications. There is a
strong synergy between the structure of production (the distribution of production
across manufacturing and services for example), the structure of income distribu-
tion (what type of jobs and incomes are associated with the production system) and
