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Consumption partial insurance of Spanish households

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  • Jose Maria Casado

    () (Banco de España)

Abstract

This paper measures how households smooth changes in consumption when incomes are shifted by permanent or transitory shocks at country and regional level. I compute insurance capacity using the Spanish Continuous Family Expenditure Survey skipping the imputation methods used by the previous literature to mitigate the significant lack of income and consumption panel data information. I find some partial insurance for permanent shocks and a downward bias when imputed data are used. There is significant sensitivity for the youngest and primary educated cohorts that becomes more relevant in some regions. I obtain that durable purchases are a source of insurance with respect to transitory shocks and the effect of family income transfers is almost negligible.

Suggested Citation

  • Jose Maria Casado, 2012. "Consumption partial insurance of Spanish households," Working Papers 1214, Banco de España;Working Papers Homepage.
  • Handle: RePEc:bde:wpaper:1214
    as

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    File Function: First version, March 2012
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Consumption; income; insurance;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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