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Estimating and testing intertemporal preferences: A unified framework for consumption, work and savings

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  • William Chin

    (IUPUI)

Abstract

Five waves of the Panel Study of Income Dynamics (PSID), 1985-1989 including both wealth supplements, are used to construct an intertemporal budget constraint for selected single headed households. A new functional form of the dual consumer profit function rationalizing consumption, labor supply and savings is specified, estimated and used to test commonly maintained separability hypotheses. Both consumption- labor and time separability are rejected. Cross-price Frisch elasticities are found not to equal zero and this in turns affects all estimates of consumption, labor supply and saving elasticities. This paper contains new results from a previous paper submitted to EconWPA 12/16/03.

Suggested Citation

  • William Chin, 2004. "Estimating and testing intertemporal preferences: A unified framework for consumption, work and savings," GE, Growth, Math methods 0409002, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpge:0409002
    Note: Type of Document - pdf; pages: 64. PDF file, 64 Pages, 9 Tables, 3 Figures.
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/ge/papers/0409/0409002.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    intertemporal; consumption; labor; labour; wealth; savings; PSID; Panel Study of Income Dynamics; consumer profit function;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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