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Economic Development, Life Cycle Consumption, and Planning Horizons

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  • Baffoe-Bonnie, J.
  • Khayum, M.

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]
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Suggested Citation

  • Baffoe-Bonnie, J. & Khayum, M., 1995. "Economic Development, Life Cycle Consumption, and Planning Horizons," Papers 4-95-1-ces, Pennsylvania State - Department of Economics.
    • Handle: RePEc:fth:pensta:4-95-1-ces
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    Keywords

    ECONOMIC DEVELOPMENT; CONSUMPTION;

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