Advanced Search
MyIDEAS: Login

"Rule-of-Thumb" Consumption, Intertemporal Substitution, and Risk Aversion

Contents:

Author Info

  • Weber, Christian E

Abstract

This article reexamines evidence that some 5O% of disposable income goes to households who simply consume their current incomes. Previous studies of such "rule-of-thumb" behavior have typically used log-linear Euler equations and have not distinguished between intertemporal substitution and relative risk aversion. In contrast, I use generalized method of moments to estimate the importance of rule-of-thumb behavior and separate intertemporal substitution from risk aversion by using the Epstein-Zin utility function. Using postwar U.S. data, I cannot reject the hypothesis that all income goes to permanent-income households--that is, that there are no rule-of-thumb households.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Article provided by American Statistical Association in its journal Journal of Business and Economic Statistics.

Volume (Year): 18 (2000)
Issue (Month): 4 (October)
Pages: 497-502

as in new window
Handle: RePEc:bes:jnlbes:v:18:y:2000:i:4:p:497-502

Contact details of provider:
Web page: http://www.amstat.org/publications/jbes/index.cfm?fuseaction=main

Order Information:
Web: http://www.amstat.org/publications/index.html

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Chen, Ming-Hsiang & Bidarkota, Prasad V., 2004. "Consumption equilibrium asset pricing in two Asian emerging markets," Journal of Asian Economics, Elsevier, vol. 15(2), pages 305-319, April.
  2. Weber, Christian E., 2002. "Intertemporal non-separability and "rule of thumb" consumption," Journal of Monetary Economics, Elsevier, vol. 49(2), pages 293-308, March.
  3. Andrew Keinsley, 2013. "Do You Mind if I Round?: Eliminating the Penny A Structural Analysis," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 201309, University of Kansas, Department of Economics.
  4. Larin, Alexander & Novak, Anna & Khvostova, Irina, 2013. "Consumption dynamics in Russia: Estimates on microdata," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 32(4), pages 29-44.
  5. Stanislav Anatolyev, 2007. "Optimal Instruments In Time Series: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 143-173, 02.
  6. Jeffrey M. Wooldridge, 2001. "Applications of Generalized Method of Moments Estimation," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 87-100, Fall.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bes:jnlbes:v:18:y:2000:i:4:p:497-502. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.