The effect of self-reported transitory income shocks on household spending
We use repeated cross-sections of the Survey of Consumer Finances (SCF) to study the effect of self-reported transitory income shocks on household food spending. The self-reported shocks in the SCF are derived from survey questions about the gap between actual and "normal" income. This approach stands in contrast to existing income shock measures in the literature, which are generally derived from the residuals of estimated earnings or income equations. Although the self-reported transitory shocks could potentially give very different answers, the overall variance and asymmetry of shocks over the business cycle are similar to those of existing residual-based estimates. Engel Curve analysis shows a significant relationship between self-reported income shocks and household food spending, though the estimated spending responses are only a small part of the substantial slowdown in the growth rate of food consumption observed during the recent economic downturn.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: 20th Street and Constitution Avenue, NW, Washington, DC 20551|
Web page: http://www.federalreserve.gov/
More information through EDIRC
|Order Information:||Web: http://www.federalreserve.gov/pubs/feds/fedsorder.html|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christopher D Carroll, 2001.
"Precautionary Saving and the Marginal Propensity To Consume Out of Permanent Income,"
Economics Working Paper Archive
445, The Johns Hopkins University,Department of Economics, revised Aug 2009.
- Carroll, Christopher D., 2009. "Precautionary saving and the marginal propensity to consume out of permanent income," Journal of Monetary Economics, Elsevier, vol. 56(6), pages 780-790, September.
- Christopher D. Carroll, 2001. "Precautionary Saving and the Marginal Propensity to Consume out of Permanent Income," NBER Working Papers 8233, National Bureau of Economic Research, Inc.
- Carroll, Christopher D., 2009. "Precautionary saving and the marginal propensity to consume out of permanent income," CFS Working Paper Series 2009/16, Center for Financial Studies (CFS).
- Blundell, Richard & Low, Hamish & Preston, Ian, 2011.
"Decomposing Changes in Income Risk Using Consumption Data,"
IZA Discussion Papers
6125, Institute for the Study of Labor (IZA).
- Richard Blundell & Hamish Low & Ian Preston, 2013. "Decomposing changes in income risk using consumption data," Quantitative Economics, Econometric Society, vol. 4(1), pages 1-37, 03.
- Richard Blundell & Hamish Low & Ian Preston, 2008. "Decomposing changes in income risk using consumption data," IFS Working Papers W08/13, Institute for Fiscal Studies.
- Jason DeBacker & Bradley Heim & Vasia Panousi & Ivan Vidangos, 2011. "Rising inequality: transitory or permanent? New evidence from a U.S. panel of household income 1987-2006," Finance and Economics Discussion Series 2011-60, Board of Governors of the Federal Reserve System (U.S.).
- Mariacristina De Nardi & Eric French & David Benson, 2011.
"Consumption and the Great Recession,"
NBER Working Papers
17688, National Bureau of Economic Research, Inc.
- Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, September.
When requesting a correction, please mention this item's handle: RePEc:fip:fedgfe:2012-64. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marlene Vikor)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.