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Consumer Demand and the Life-Cycle Allocation of Household Expenditures

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  • Blundell, Richard
  • Browning, Martin
  • Meghir, Costas

Abstract

The purpose of this paper is to estimate the parameters of household preferences that determine the allocation of goods within the period and over the life cycle, using micro data. In doing so, the authors are able to identify important effects of demographics, labor market status, and other household characteristics on the intertemporal allocation of expenditure. They test the validity of the life-cycle model using excess sensitivity tests and find that controlling for demographics and labor market status variables can largely explain the excess sensitivity of consumption to anticipated changes in income. Copyright 1994 by The Review of Economic Studies Limited.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Economic Studies.

Volume (Year): 61 (1994)
Issue (Month): 1 (January)
Pages: 57-80

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Handle: RePEc:bla:restud:v:61:y:1994:i:1:p:57-80

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