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Economic Development, Life-Cycle Consumption and Planning Hirizon

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  • John Baffore-Bonnie
  • Mohammed Khayum

Abstract

This article presents estimates of consumer planning horizons for countries at different levels of economic development. Within an intertemporal optimization framework a direct relationship is observed between the length of consumers' planning horizons and the level of economic development. In particular, consumption behavior in a sample of developed economies reflect longer planning horizons than in the sample of less developed economics. The average planning horizon for a group of less developed economies is about 7 months, while it is 1.6 and 3.8 years for middle and high income economies, respectively. [E21, O50]

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Article provided by Taylor & Francis Journals in its journal International Economic Journal.

Volume (Year): 11 (1997)
Issue (Month): 4 ()
Pages: 17-37

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Handle: RePEc:taf:intecj:v:11:y:1997:i:4:p:17-37

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