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the structure of expenditures by households (the triangular relationship identified in
Fig.
11.1
). Changes in any one of these links will generate important changes on the
other two. Different consumption patterns caused by demographic changes such as
an ageing population will change the industrial production structure of the Chicago
region in the future. In turn, these changes in production structure will have
important implications on the profile of activities that remain competitive in the
Chicago region, creating further feedback effects on the nature of local jobs and
wage and salary income.
A final concern is this phase of the analysis was the implications for the
distribution of income; in parallel to the division of consumption expenditures by
age, we also explored differences due to levels of income. A combination of factors
will see the income inequality rise in Chicago through 2030 although this result is
modified by the effects of migration and consideration of assets (especially non
wage and salary income).
11.2.4 Implications
In this research, a further important question can be raised. Is consumption becom-
ing more important in the Chicago region in the future? To answer this question, the
feedback effects of consumption on the production in the Chicago region can be
evaluated. To accomplish this, the trends of consumption multipliers in the Chicago
region up to 2030 were estimated. From 2003, the consumption multipliers are
predicted to increase gradually until 2030 rising from 1.98 to 2.03. More critically,
are the differences in consumption patterns by age group are they statistically
significant? To check whether the differences in consumption behaviors between
the one representative household and the disaggregated households (six age groups
and five income quintiles) and those between disaggregate representative
households are statistically significant,
F
tests are applied. The results revealed
statistically significant differences between the one representative household and
six age groups, and similarly between age groups. Compared with the one repre-
sentative household, most age groups show statistically significant differences in
housing consumption, but all age groups present no statistically significant
differences in the consumption of personal care and pensions, and most age groups
show no statistically significant differences in the consumption of beverages,
transportation and entertainment. Between age groups, most age groups show
significant differences in the consumption of housing, health care and education.
However, most age groups present no significant differences in the consumption
of clothing, entertainment and personal care. In summary, the combination of
differences in the consumption by age group—in total and in terms of differences
in types of goods and services consumed—and the changes in income distribution
generated by continuing changes in economic structure will combine to create
important impacts on the Chicago economy that could not be revealed through
models using a single representative household.
