IDEAS home Printed from https://ideas.repec.org/p/hst/hstdps/d07-237.html
   My bibliography  Save this paper

Volatility in Panel Data of Household Expenditure

Author

Listed:
  • Naohito Abe

Abstract

The variance of growth rates of recall food expenditure is usually greater than the variance of the income growth rate. Many researchers regard the strong volatility as a symptom of measurement error. Comparing two data sets, diary data and recall data, I find that the measurement error cannot account for the observed large variance in the consumption data. Variance decomposition of the consumption and income growth rates reveals that the permanent component of the consumption variance is smaller than that of the income variance, suggesting that the consumption smoothing holds in the long run. Short run fluctuation in consumption, however, is not caused by measurement error. The implication of this finding for the modeling of household behavior is also discussed.

Suggested Citation

  • Naohito Abe, 2008. "Volatility in Panel Data of Household Expenditure," Hi-Stat Discussion Paper Series d07-237, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hst:hstdps:d07-237
    as

    Download full text from publisher

    File URL: http://hi-stat.ier.hit-u.ac.jp/research/discussion/2007/pdf/D07-237.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chiwaula, Levison & Waibel, Hermann, 2011. "Seasonal bias in household vulnerability to poverty stimates: insights from a natural experiment," MPRA Paper 30716, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hst:hstdps:d07-237. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tatsuji Makino (email available below). General contact details of provider: https://edirc.repec.org/data/iehitjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.