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Consumption partial insurance of Spanish households

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  • Jose Maria Casado

    ()
    (Banco de España)

Abstract

This paper measures how households smooth changes in consumption when incomes are shifted by permanent or transitory shocks at country and regional level. I compute insurance capacity using the Spanish Continuous Family Expenditure Survey skipping the imputation methods used by the previous literature to mitigate the significant lack of income and consumption panel data information. I find some partial insurance for permanent shocks and a downward bias when imputed data are used. There is significant sensitivity for the youngest and primary educated cohorts that becomes more relevant in some regions. I obtain that durable purchases are a source of insurance with respect to transitory shocks and the effect of family income transfers is almost negligible.

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File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/12/Fich/dt1214e.pdf
File Function: First version, March 2012
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Bibliographic Info

Paper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 1214.

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Length: 45 pages
Date of creation: Mar 2012
Date of revision:
Handle: RePEc:bde:wpaper:1214

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Keywords: Consumption; income; insurance;

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References

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  1. Raquel Carrasco & José M. Labeaga & J. David López-Salido, 2005. "Consumption and Habits: Evidence from Panel Data," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 115(500), pages 144-165, 01.
  2. José Casado, 2011. "From income to consumption: measuring households partial insurance," Empirical Economics, Springer, Springer, vol. 40(2), pages 471-495, April.
  3. Martin Browning & Thomas Crossley, 1996. "Unemployment Insurance Benefit Levels and Consumption Changes," Discussion Papers 96-11, University of Copenhagen. Department of Economics.
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  6. repec:bla:restud:v:77:y:2010:i:4:p:1382-1402 is not listed on IDEAS
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  9. Martin Browning & M. Dolores Collado, 2004. "Habits and Heterogeneity in Demands: a Panel Data Analysis," CAM Working Papers, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics 2004-18, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
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  14. Richard Blundell & Ian Preston, 1998. "Consumption Inequality And Income Uncertainty," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(2), pages 603-640, May.
  15. Olympia Bover & Pilar García-Perea & Pedro Portugal, 2000. "Labour market outliers: Lessons from Portugal and Spain," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 15(31), pages 379-428, October.
  16. Gregory D. Hess & Kwanho Shin, 1997. "Risk sharing by households within and across regions and industries," Research Working Paper, Federal Reserve Bank of Kansas City 97-07, Federal Reserve Bank of Kansas City.
  17. A. Cutanda & F. Mochón & José M. Labeaga, 2006. "Desigualdad en consumo y renta en España y su relación con algunas variables demográficas," Working Papers 2006-26, FEDEA.
  18. Pedro Portugal & Olivier Blanchard, 2001. "What Hides Behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets," American Economic Review, American Economic Association, American Economic Association, vol. 91(1), pages 187-207, March.
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