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The Prudence of Mexican Consumers

Author

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  • David J. Mckenzie

    (Stanford University)

Abstract

The ENIGH household surveys are used to investigate the strength of the precautionary motive in Mexico, using pseudo-panel methods to obtain estimates of the coefficient of relative prudence for Mexican consumers. The method provided accounts for the aggregation problems arising from unequally-spaced surveys. The low levels of prudence found can help explain why consumers had insufficient savings to smooth consumption during the peso crisis. Differences in prudence may also explain the low household savings rates in Mexico compared to the high savings rates in East Asian countries such as Taiwan.

Suggested Citation

  • David J. Mckenzie, 2002. "The Prudence of Mexican Consumers," Economía Mexicana NUEVA ÉPOCA, CIDE, División de Economía, vol. 0(2), pages 393-407, July-Dece.
    • Handle: RePEc:emc:ecomex:v:11:y:2002:i:2:p:393-407
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    File URL: http://www.economiamexicana.cide.edu/num_anteriores/XI-2/05_DAVID_MCKENZIE.pdf
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    References listed on IDEAS

    as
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