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Habit formation in household consumption: evidence from Japanese panel data

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  • Koichiro Iwamoto

    (College of Contemporary Management, Aichi Gakusen University)

Abstract

Habit formation in consumption has important implications for the effects of macroeconomic policies. Using micro data from the Japanese Panel Survey of Consumers (JPSC) for the period 1998-2004, an Euler equation à la Dynan (2000) allowing for time-nonseparablity in consumer preferences is estimated. In contrast to previous, macro data-based studies on consumption in Japan, the estimates yield no evidence of habit formation and appear consistent with durability in consumption.

Suggested Citation

  • Koichiro Iwamoto, 2013. "Habit formation in household consumption: evidence from Japanese panel data," Economics Bulletin, AccessEcon, vol. 33(1), pages 323-333.
    • Handle: RePEc:ebl:ecbull:eb-11-00313
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    References listed on IDEAS

    as
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    Cited by:

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    More about this item

    Keywords

    household consumption; habit formation; panel data;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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