Quasi-Geometric Consumers: Panel Data Evidence
AbstractThis paper examines the empirical relevance of an intertemporal model of consumption with dynamically inconsistent decision makers. The model has testable implications concerning the relation between the consumers' degrees of short-run patience (self-control) and their consumption-saving decisions. Using Spanish panel data on household expenditure, we estimate the Euler equation derived from the model. We find evidence in favor of consumers' preferences being time inconsistent. Moreover, our results indicate that there are significant differences in the degrees of short-run patience across households.
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Bibliographic InfoPaper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2003-09.
Length: 16 pages
Date of creation: Feb 2003
Date of revision:
Publication status: Published by Ivie
Time-inconsistency; Quasi-geometric discounting; Hyperbolic discounting; panel data;
Find related papers by JEL classification:
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
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