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Hyperbolic Discounting and Household Consumption:An Analysis based on a Large-scale Survey in Japan

Author

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  • Shoko Morimoto

    () (Osaka University, Department of Economics)

Abstract

In this paper, I investigate what is the difference in consumption behavior between hyperbolic and non-hyperbolic discounting households by using data from hJapan Household Survey on Consumer Preferences and Satisfaction h conducted by Osaka University. I show that the marginal propensity to consumption out of income (fixed assets, respectively) of hyperbolic discounting household is higher (lower) than that of non-hyperbolic discounting household. These results are consistent with the theoretical propositions by Laibson (1997) and Angeletos et al. (2001).

Suggested Citation

  • Shoko Morimoto, 2009. "Hyperbolic Discounting and Household Consumption:An Analysis based on a Large-scale Survey in Japan," Discussion Papers in Economics and Business 09-19, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  • Handle: RePEc:osk:wpaper:0919
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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0919.pdf
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    Keywords

    Hyperbolic discounting; Marginal propensity to consume;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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