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Economic Development, Life-Cycle Consumption and Planning Hirizon

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  • John Baffore-Bonnie
  • Mohammed Khayum

Abstract

This article presents estimates of consumer planning horizons for countries at different levels of economic development. Within an intertemporal optimization framework a direct relationship is observed between the length of consumers' planning horizons and the level of economic development. In particular, consumption behavior in a sample of developed economies reflect longer planning horizons than in the sample of less developed economics. The average planning horizon for a group of less developed economies is about 7 months, while it is 1.6 and 3.8 years for middle and high income economies, respectively. [E21, O50]

Suggested Citation

  • John Baffore-Bonnie & Mohammed Khayum, 1997. "Economic Development, Life-Cycle Consumption and Planning Hirizon," International Economic Journal, Taylor & Francis Journals, vol. 11(4), pages 17-37.
  • Handle: RePEc:taf:intecj:v:11:y:1997:i:4:p:17-37
    DOI: 10.1080/10168739700000024
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