A Theoretical Intertemporal Choice Model of the Household
AbstractA theory of representative household behaviour based on multi-period utility maximisation is set out. The model is general and attempts to focus both on the intertemporal nature of many household decisions and on the interdependence at any point in time of various real and financial choices. An aim of the paper is to avoid premature specification of the form of the utility function (except for intertemporal additivity). This enables the derivation of general dynamic marginal utility conditions. To derive empirically implementable estimating equations, the utility function is later approximated by a quadratic. The implied adjustment dynamics of these equations are surprisingly simple, since they collapse to a simple partial adjustment framework, even for the very general utility function specifications.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Reserve Bank of Australia in its series RBA Research Discussion Papers with number rdp35.
Date of creation: Aug 1974
Date of revision:
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paula Drew).
If references are entirely missing, you can add them using this form.