IDEAS home Printed from https://ideas.repec.org/p/hst/hstdps/d06-184.html
   My bibliography  Save this paper

Dynamic Consumption Behavior: Evidence from Japanese Household Panel Data (Revised version)

Author

Listed:
  • Yukinobu Kitamura

Abstract

Household consumption and saving behavior have been the central theme of recent macroeconomic literature. Following the work of Robert Hall (1978) and a series of papers by Fumio Hayashi, the focus of the literature has been on dynamic consumption behavior. Using the Family Income and Expenditure Survey (FIES), we conducted a dynamic panel analysis of consumption behavior. We examined intertemporal smoothing and the durability of consumption behavior with or without liquidity constraints. Our results are summarized as follows: (1) households with debt as well as debt-free households with low annual incomes and net savings faced disposable income constraints; (2) for these types of households, parameter values of lagged dependent variables between MLE and GMM are very close and therefore statistically significant and the implications for each remain more or less the same; (3) debt-free households with high annual incomes and net savings also faced a disposable income constraint in MLE that is not expected in the permanent income-lifecycle hypothesis.

Suggested Citation

  • Yukinobu Kitamura, 2006. "Dynamic Consumption Behavior: Evidence from Japanese Household Panel Data (Revised version)," Hi-Stat Discussion Paper Series d06-184, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hst:hstdps:d06-184
    as

    Download full text from publisher

    File URL: http://hi-stat.ier.hit-u.ac.jp/research/discussion/2006/pdf/D06-184.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bagliano, Fabio-Cesare & Bertola, Giuseppe, 2007. "Models for Dynamic Macroeconomics," OUP Catalogue, Oxford University Press, number 9780199228324.
    2. Bar-Ilan, Avner & Blinder, Alan S, 1992. "Consumer Durables: Evidence on the Optimality of Usually Doing Nothing," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 24(2), pages 258-272, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dunn, Wendy E., 2003. "The effects of precautionary saving motives on (S,s) bands for home purchases," Regional Science and Urban Economics, Elsevier, vol. 33(4), pages 467-488, July.
    2. Giuseppe Bertola & Luigi Guiso & Luigi Pistaferri, 2005. "Uncertainty and Consumer Durables Adjustment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(4), pages 973-1007.
    3. Viviana P. Fernandez, 2000. "Decisions To Replace Consumer Durables Goods: An Econometric Application Of Wiener And Renewal Processes," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 452-461, August.
    4. Anna Pavlova, "undated". ""Adjustment Costs, Learning-by-Doing, and Technology Adoption under Uncertainty''," CARESS Working Papres 99-07, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
    5. Christopher L. House & Jing Zhang, 2012. "Layoffs, Lemons and Temps," NBER Working Papers 17962, National Bureau of Economic Research, Inc.
    6. Ulrich Frische & Ingrid Größl, 2010. "New Keynesian DSGE Models and the IS-LM Paradigm," IMK Working Paper 1-2010, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    7. Kathleen W. Johnson, 1999. "Credit constraints, consumer leasing and the automobile replacement decision," Finance and Economics Discussion Series 1999-68, Board of Governors of the Federal Reserve System (U.S.).
    8. Bertola, Giuseppe, 2017. "European unemployment revisited: Shocks, institutions, integration," Research in Economics, Elsevier, vol. 71(3), pages 588-612.
    9. D’Haultfœuille, Xavier & Durrmeyer, Isis & Février, Philippe, 2016. "Disentangling sources of vehicle emissions reduction in France: 2003–2008," International Journal of Industrial Organization, Elsevier, vol. 47(C), pages 186-229.
    10. Caballero, Ricardo J. & Engel, Eduardo M.R.A., 2007. "Price stickiness in Ss models: New interpretations of old results," Journal of Monetary Economics, Elsevier, vol. 54(Supplemen), pages 100-121, September.
    11. Ulrike Malmendier & Leslie Sheng Shen, 2018. "Scarred Consumption," NBER Working Papers 24696, National Bureau of Economic Research, Inc.
    12. Tanisa Tawichsri, 2018. "Consumption Responses and Redistributive Implications of Luxury Durable Tax Rebates," PIER Discussion Papers 99, Puey Ungphakorn Institute for Economic Research, revised Jul 2022.
    13. Andrew Caplin & John Leahy, 2004. "How Important Is Discrete Adjustment in Aggregate Fluctuations?," NBER Chapters, in: Growth and Productivity in East Asia, pages 351-376, National Bureau of Economic Research, Inc.
    14. David Berger & Joseph Vavra, 2015. "Consumption Dynamics During Recessions," Econometrica, Econometric Society, vol. 83, pages 101-154, January.
    15. Yu‐Fu Chen & Michael Funke, 2010. "Booms, Recessions And Financial Turmoil: A Fresh Look At Investment Decisions Under Cyclical Uncertainty," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(3), pages 290-317, July.
    16. R. López Murphy, F. Navajas, S. Urbiztondo, C. Moskovits, 1996. "Determinantes del Ahorro Interno: El Caso Argentino," Working Papers 51, FIEL.
    17. Jose Luengo-Prado, Maria, 2006. "Durables, nondurables, down payments and consumption excesses," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1509-1539, October.
    18. Jerome Adda & Russell Cooper, 2000. "The Dynamics of Car Sales: A Discrete Choice Approach," NBER Working Papers 7785, National Bureau of Economic Research, Inc.
    19. Jerome Adda & Russell Cooper, 2000. "Balladurette and Juppette: A Discrete Analysis of Scrapping Subsidies," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 778-806, August.

    More about this item

    Keywords

    dynamic consumption; panel data; liquidity constraints;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hst:hstdps:d06-184. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tatsuji Makino (email available below). General contact details of provider: https://edirc.repec.org/data/iehitjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.