Estimating and testing intertemporal preferences: A unified framework for consumption, work and savings
AbstractFive waves of the Panel Study of Income Dynamics (PSID), 1985-1989 including both wealth supplements, are used to construct an intertemporal budget constraint for selected single headed households. A new functional form of the dual consumer profit function rationalizing consumption, labor supply and savings is specified, estimated and used to test commonly maintained separability hypotheses. Both consumption- labor and time separability are rejected. Cross-price Frisch elasticities are found not to equal zero and this in turns affects all estimates of consumption, labor supply and saving elasticities. This paper contains new results from a previous paper submitted to EconWPA 12/16/03.
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 EconWPA in its series GE, Growth, Math methods with number 0409002.
Length: 64 pages
Date of creation: 12 Sep 2004
Date of revision:
Note: Type of Document - pdf; pages: 64. PDF file, 64 Pages, 9 Tables, 3 Figures.
Contact details of provider:
Web page: http://220.127.116.11
intertemporal; consumption; labor; labour; wealth; savings; PSID; Panel Study of Income Dynamics; consumer profit function;
Find related papers by JEL classification:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
This paper has been announced in the following NEP Reports:
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.:
- Barnett, William A & Hahm, Jeong Ho, 1994. "Financial-Firm Production of Monetary Services: A Generalized Symmetric Barnett Variable-Profit-Function Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(1), pages 33-46, January.
- Barnett, William A, 1983. "New Indices of Money Supply and the Flexible Laurent Demand System," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(1), pages 7-23, January.
- James Banks & Richard Blundell & Arthur Lewbel, 1997.
"Quadratic Engel Curves And Consumer Demand,"
The Review of Economics and Statistics,
MIT Press, vol. 79(4), pages 527-539, November.
- Banks, J & Blundell, R & Lewbel, A, 1997. "Quadratic engel curves and consumer demand," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
- Chaudhuri, Anita, 1995. "On the relationship between the Frisch and Slutsky decompositions," Economics Letters, Elsevier, vol. 47(3-4), pages 283-290, March.
- Browning, Martin & Deaton, Angus & Irish, Margaret, 1985. "A Profitable Approach to Labor Supply and Commodity Demands over the Life-Cycle," Econometrica, Econometric Society, vol. 53(3), pages 503-43, May.
- Philip Merrigan, 1994. "Family Labor Supply and the Life Cycle: Estimating the Browning, Deaton and Irish Household Model," Cahiers de recherche CREFE / CREFE Working Papers 26, CREFE, Université du Québec à Montréal.
- David L. Ryan & Terence J. Wales, 1999.
"Flexible And Semiflexible Consumer Demands With Quadratic Engel Curves,"
The Review of Economics and Statistics,
MIT Press, vol. 81(2), pages 277-287, May.
- David L. Ryan & Terence J. Wales, . "Flexible and Semiflexible Consumer Demands With Quadratic Engel Curves," Old UBC Departmental Papers 9630, UBC Department of Economics.
- Blackorby, Charles & Primont, Daniel & Russell, R. Robert, 1977. "On testing separability restrictions with flexible functional forms," Journal of Econometrics, Elsevier, vol. 5(2), pages 195-209, March.
- Meghir, Costas & Weber, Guglielmo, 1996. "Intertemporal Nonseparability or Borrowing Restrictions? A Disaggregate Analysis Using a U.S. Consumption Panel," Econometrica, Econometric Society, vol. 64(5), pages 1151-81, September.
- Altonji, Joseph G, 1986.
"Intertemporal Substitution in Labor Supply: Evidence from Micro Data,"
Journal of Political Economy,
University of Chicago Press, vol. 94(3), pages S176-S215, June.
- Joseph Altonji, 1984. "Intertemporal Substitution in Labor Supply: Evidence from Micro Data," Working Papers 562, Princeton University, Department of Economics, Industrial Relations Section..
- Lewbel, Arthur, 1991. "The Rank of Demand Systems: Theory and Nonparametric Estimation," Econometrica, Econometric Society, vol. 59(3), pages 711-30, May.
- Kim, H Youn, 1993. "Frisch Demand Functions and Intertemporal Substitution in Consumption," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(3), pages 445-54, August.
- Cooper, Russel J. & McLaren, Keith R. & Wong, Gary K. K., 2001. "On the empirical exploitation of consumers' profit functions in static analyses," Economics Letters, Elsevier, vol. 72(2), pages 181-187, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).
If references are entirely missing, you can add them using this form.