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Experimental tests on consumption, savings and pensions

Author

Listed:
  • Enrique Fatás

    () (LINEX, University of Valencia.)

  • Juan A. Lacomba

    () (Department of Economic Theory and Economic History, University of Granada.)

  • Francisco M. Lagos

    () (Department of Economic Theory and Economic History, University of Granada.)

  • Ana I. Moro

    () (Department of Economic Theory and Economic History, University of Granada.)

Abstract

As part of the current debate on the reform of pension systems, this article examines the potential effects on consumption behaviour of implementing a lump-sum payment in a public pension system. This work explores an experimental investigation into retirement consumption behaviour with two central features: first, there exists a decreasing probability of surviving; second, there are two sequences of income, one when individual works and another when she is retired. The results show how subjects seem to plan their consumption and saving choices conditionated by both the long horizon with no incomes and the lump-sum payment. This yields, in the majority of periods, a surprising over-saving behaviour.

Suggested Citation

  • Enrique Fatás & Juan A. Lacomba & Francisco M. Lagos & Ana I. Moro, 2008. "Experimental tests on consumption, savings and pensions," ThE Papers 08/14, Department of Economic Theory and Economic History of the University of Granada..
  • Handle: RePEc:gra:wpaper:08/14
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    File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers08_14.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Experimental test; consumption; savings; lump-sum payment.;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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