1 CONSUMPTION EXPENDITURE OF THE ELDERLY- HEADED HOUSEHOLDS IN MINDANAO by Adriane John P. Luncido, Edgardo D. Cruz, and Michael L. Ayala 1 Abstract This study has identified and presented the sources of income, the consumption expenditure behavior and the factors affecting the consumption expenditure of the elderly-headed households in Mindanao. Descriptive statistics were used to present the consumption expenditure and sources of income of the elderly-headed households. Ordinary Least Squares or OLS was used to know the factors that can affect the consumption expenditure of elderly-headed households. Results showed that real average consumption expenditure of the elderly-headed households in Mindanao by region was found out to be generally decreasing over time. The main sources of income of the elderly-headed households are the following: cash receipts, support, assistance and relief from abroad; pension and retirement’s compensation; cash receipts, support, assistance and relief from domestic sources; received gifts; wages and salaries from agricultural activities; income from family sustenance activities; rentals from non-agricultural lands, buildings and others; interest from banks; and dividends from investment. The results from Ordinary Least Squares estimation revealed that cash receipts, support, assistance and relief from abroad; cash receipts, support, assistance and relief from domestic sources; pension and retirement’s compensation, income from entrepreneurial activity, number of young dependents, family size; educational attainment and sex of the elderly-headed households are significant factors that positively affect the consumption expenditure of elderly-headed households in Mindanao. Furthermore, result of the estimation showed that 59.13 percent of the variability of consumption expenditure of elderly-headed household is explained by the predictors of the model or variables considered in the study. Keywords: consumption, elderly-headed households, Mindanao, OLS INTRODUCTION An unresolved issue in the economics of aging is whether there is dissaving in old age, or whether the elderly keep accumulating wealth (OECD, 1998). This is a topic of great policy interest because the world is entering unfamiliar territory with respect to population aging. Forecasts made by the demographers infer a huge increase both in absolute numbers and in proportions of elderly people as a consequence of dramatic falls in both fertility and mortality rates (Abejo, 2004). The number of people over the age of 60 is projected to reach 1 billion by 2020 and almost 2 billion by 2050, representing 22 percent of the world’s population. The proportion of individuals aged 80 or over is projected to rise from 1 percent to 4 percent of the global population between 2011 and 2050 (Bloom et al., 2011). Kho and Arquiza (2010) inferred that most of the world’s aging population will belong to developing countries, with 60 percent belonging in Asia. The elderly persons serve as the bridge of the legacies of one generation to another. Lucentales (2002) noted that whatever good society enjoys today reflects the goodness of the humanity that the older persons have nurtured during their time. Contributions of the elderlies in the enhancement of the country’s institutions such as government, family, education and religion cannot be ignored (Carlos, 1999). Thus, it is an irrefragable and incontrovertible fact that elderly people have played an essential role in the community we live in today, particularly in their respective fields of specialization. Many empirical studies about the consumption expenditure behavior of the elderly-headed households have been found out to be declining. Therefore, this study wants to know the income sources, consumption-expenditure behavior and the factors which may possibly affect the consumption expenditures 1 Graduate, BS Economics, School of Applied Economics (SAEc), University of Southeastern Philippines (USeP), Davao City and Faculty Members of SAEc, USeP, Davao City.