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Saving Behavior under the Influence of Income Risk: An Experimental Study


  • Tomoki Kitamura

    () (NLI-Research Institute and Graduate School of International Management, Aoyama Gakuin University)

  • Yasuhiro Yonezawa

    () (Graduate School of Finance, Accounting and Law, Waseda University)

  • Munenori Nakasato

    () (Graduate School of International Management, Aoyama Gakuin University)


Individual subjects are experimentally tested for precautionary saving. We use a simplified experimental framework and decision supporting tool to show that subject's consumption is consistent with precautionary saving. We find that subjects overact in changing current income. However, those over-reactions cancel each other, and subject's consumption behavior is close to the optimal solutions on average.

Suggested Citation

  • Tomoki Kitamura & Yasuhiro Yonezawa & Munenori Nakasato, 2010. "Saving Behavior under the Influence of Income Risk: An Experimental Study," Economics Bulletin, AccessEcon, vol. 30(2), pages 967-974.
  • Handle: RePEc:ebl:ecbull:eb-10-00153

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    References listed on IDEAS

    1. Enrica Carbone & John D. Hey, 2004. "The effect of unemployment on consumption: an experimental analysis," Economic Journal, Royal Economic Society, vol. 114(497), pages 660-683, July.
    2. Lusardi, Annamaria, 1998. "On the Importance of the Precautionary Saving Motive," American Economic Review, American Economic Association, vol. 88(2), pages 449-453, May.
    3. T. Parker Ballinger & Michael G. Palumbo & Nathaniel T. Wilcox, 2003. "Precautionary saving and social learning across generations: an experiment," Economic Journal, Royal Economic Society, vol. 113(490), pages 920-947, October.
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    Precautionary Saving; Experiment;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior


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