Adjustment of Consumers' Durables Stocks: Evidence from Automobile Purchases
Disturbances to aggregate expenditure on consumer durables are much more persistent than predicted by an optimizing representative consumer model. Recent work in macroeconomics has explored this "slowness to adjust" in the context of consumers facing transactions costs when purchasing durable goods. This approach produces infrequent household purchases and requires explicit attention to aggregation of households. This paper considers household behavior directly, using panel data on automobile purchases and finds that about half of the households purchase automobiles subject only to transactions costs. Explicit aggregation shows that the cross-section distribution of households according to their durables stocks is quite similar to that theoretically predicted. Simulated aggregate expenditures using observed household slowness to adjust show persistence of aggregate shocks and response to income growth consistent with the aggregate data.
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: 3254 Steinberg Hall-Dietrich Hall, Philadelphia, PA 19104-6367|
Phone: (215) 898-7616
Fax: (215) 573-8084
Web page: http://finance.wharton.upenn.edu/~rlwctr/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:fth:pennfi:22-91. 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: (Thomas Krichel)
If references are entirely missing, you can add them using this form.