This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Rational exuberance at the mall: addiction to carrying a credit card balance

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Kaili Shen
David E. Giles

Additional information is available for the following registered author(s):

Abstract

The Becker-Murphy model of rational addiction is tested with New Zealand credit card debt data. The results clearly favour the rational addiction model over the myopic, backward-looking model. The estimated short-run and long-run price elasticities are -0.58 and -2.32 respectively, and the estimated rate of time-preference is 6.7% per quarter.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://taylorandfrancis.metapress.com/link.asp?target=contribution&id=N00Q87017U0H4245
File Format: text/html
File Function:
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 38 (2006)
Issue (Month): 5 (March)
Pages: 587-592
Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Handle: RePEc:taf:applec:v:38:y:2006:i:5:p:587-592

Contact details of provider:
Web page: http://www.tandf.co.uk/journals/routledge/00036846.html

Order Information:
Web: http://www.tandf.co.uk/journals/subscription.html

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

Other versions of this item:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Baltagi, Badi H & Griffin, James M, 2001. "The Econometrics of Rational Addiction: The Case of Cigarettes," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 449-54, October.
  2. Wu, De-Min, 1973. "Alternative Tests of Independence Between Stochastic Regressors and Disturbances," Econometrica, Econometric Society, vol. 41(4), pages 733-50, July. [Downloadable!] (restricted)
  3. MacKinnon, James G & Haug, Alfred A & Michelis, Leo, 1999. "Numerical Distribution Functions of Likelihood Ratio Tests for Cointegration," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(5), pages 563-77, Sept.-Oct. [Downloadable!]
    Other versions:
  4. Hylleberg, S. & Engle, R.F. & Granger, C.W.J. & Yoo, B.S., 1988. "Seasonal, Integration And Cointegration," Papers 6-88-2, Pennsylvania State - Department of Economics.
    Other versions:
  5. Franses, Philip Hans, 2001. "How to Deal with Intercept and Trend in Practical Cointegration Analysis?," Applied Economics, Taylor and Francis Journals, vol. 33(5), pages 577-79, April. [Downloadable!] (restricted)
    Other versions:
  6. Silvia Tiezzi, 2003. "Addiction and Smoking Behaviour in Italy," Department of Economics University of Siena 412, Department of Economics, University of Siena. [Downloadable!]
  7. Badi H. Baltagi & James M. Griffin, 2002. "Rational addiction to alcohol: panel data analysis of liquor consumption," Health Economics, John Wiley & Sons, Ltd., vol. 11(6), pages 485-491. [Downloadable!]
  8. Ghysels, Eric & Lee, Hahn S. & Noh, Jaesum, 1994. "Testing for unit roots in seasonal time series : Some theoretical extensions and a Monte Carlo investigation," Journal of Econometrics, Elsevier, vol. 62(2), pages 415-442, June. [Downloadable!] (restricted)
  9. Pollak, Robert A, 1970. "Habit Formation and Dynamic Demand Functions," Journal of Political Economy, University of Chicago Press, vol. 78(4), pages 745-63, Part I Ju. [Downloadable!] (restricted)
  10. Michael Grossman & Frank J. Chaloupka & Charles C. Brown, 1999. "The Demand for Cocaine by Young Adults: A Rational Addiction Approach," NBER Working Papers 5713, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  11. Gary S. Becker & Michael Grossman & Kevin M. Murphy, 1994. "An Empirical Analysis of Cigarette Addiction," NBER Working Papers 3322, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  12. Grossman, Michael & Chaloupka, Frank J & Sirtalan, Ismail, 1998. "An Empirical Analysis of Alcohol Addiction: Results from the Monitoring the Future Panels," Economic Inquiry, Oxford University Press, vol. 36(1), pages 39-48, January.
    Other versions:
  13. Bask, Mikael & Melkersson, Maria, 2000. "Rational Addiction and Smoking when there are Legal and Illegal Cigarettes," UmeÃ¥ Economic Studies 543, Umeå University, Department of Economics. [Downloadable!]
  14. Hammond, Peter J, 1976. "Changing Tastes and Coherent Dynamic Choice," Review of Economic Studies, Blackwell Publishing, vol. 43(1), pages 159-73, February. [Downloadable!] (restricted)
  15. Bentzen, J. & Eriksson, T. & Smith, V., 1997. "Rational Addiction and Alcohol Consumption: Evidence from the Nordic Countries," Papers 97-16, Aarhus School of Business - Department of Economics.
  16. Olekalns, Nilss & Bardsley, Peter, 1996. "Rational Addiction to Caffeine: An Analysis of Coffee Consumption," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 1100-1104, October. [Downloadable!] (restricted)
    Other versions:
  17. Laux, Fritz L., 2000. "Addiction as a market failure: using rational addiction results to justify tobacco regulation," Journal of Health Economics, Elsevier, vol. 19(4), pages 421-437, July. [Downloadable!] (restricted)
  18. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November. [Downloadable!] (restricted)
  19. Frank J. Chaloupka, 1991. "Rational Addictive Behavior and Cigarette Smoking," NBER Working Papers 3268, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  20. Cameron, Samuel, 1999. "Rational Addiction and the Demand for Cinema," Applied Economics Letters, Taylor and Francis Journals, vol. 6(9), pages 617-20, September. [Downloadable!] (restricted)
  21. MacKinnon, James G, 1996. "Numerical Distribution Functions for Unit Root and Cointegration Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 601-18, Nov.-Dec.. [Downloadable!] (restricted)
    Other versions:
  22. Sisto, Andrea & Zanola, Roberto, 2004. "Rational Addiction to Cinema? A Dynamic Panel Analysis of European Countries," P.O.L.I.S. department's Working Papers 38, Department of Public Policy and Public Choice - POLIS. [Downloadable!]
  23. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Brosio, Giorgio & Zanola, Roberto, 2006. "Can violence be rational? An empirical analysis of Colombia," P.O.L.I.S. department's Working Papers 74, Department of Public Policy and Public Choice - POLIS. [Downloadable!]
Statistics
Access and download statistics

Did you know? Over 800 institutions contribute their bibliographic data directly to this service.

This page was last updated on 2008-9-25.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.