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Borrowing Constraints and Consumption Behavior in Japan Author info | Abstract | Publisher info | Download info | Related research | Statistics Midori Wakabayashi
Charles Yuji Horioka
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In this paper, we use Japanese micro data to examine what characteristics borrowing-constrained households have and whether borrowing constraints have an important influence on household consumption behavior. We identify borrowing-constrained households using three different indicators, some of which are unique to our data source, and find that the characteristics of households that are likely to be borrowing-constrained differ depending on which of the three indicators we use. We also find that changes in current income have a positive and significant impact on changes in consumption in the case of households that are likely to be borrowing-constrained but not in the case of households that are unlikely to be borrowing-constrained. This result suggests that borrowing constraints have an important influence on household consumption behavior and that the presence of borrowing constraints is one explanation for why the life cycle-permanent income hypothesis does not hold in the real world.
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Paper provided by Institute of Social and Economic Research, Osaka University in its series ISER Discussion Paper with number
0640.
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Date of creation: Aug 2005Date of revision:
Handle: RePEc:dpr:wpaper:0640Contact details of provider: Postal: 6-1 Mihogaoka, Ibaraki, Osaka 567-0047 Fax: 81-6-6878-2766 Email: Web page: http://www.iser.osaka-u.ac.jp More information through EDIRC
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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.)
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