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Simple life cycle and permanent income hypotheses imply that changes in consumption should be unforecastable. Rational forward-looking agents ought to smooth consumption over the life cycle and exhaust the asset stock accumulated during the working career in retirement. Empirical observations...
Persistent link: https://www.econbiz.de/10012502961
This paper tests whether the Ricardian Equivalence proposition holds in a life cycle consumption laboratory experiment. This proposition is a fundamental assumption underlying numerous studies on intertemporal choice and has important implications for tax policy. Using nonparametric and panel...
Persistent link: https://www.econbiz.de/10010384031
We revisit the alleged retirement consumption puzzle. According to the life-cycle theory, foreseeable income reductions such as those around retirement should not affect consumption. However, we first recall that given higher leisure endowments after retirement, the theory does predict a fall of...
Persistent link: https://www.econbiz.de/10011455042
We extend the canonical income process with persistent and transitory risk to shock distributions with left-skewness and excess kurtosis, to which we refer as higher-order risk. We estimate our extended income process by GMM for household data from the United States. We find countercyclical...
Persistent link: https://www.econbiz.de/10012215285
That historical inequality can affect long run macroeconomic performance has been argued by a large literature on endogenous inequality using models of indivisibilities in occupational choice, in the presence of borrowing constraints. These models are characterized by a continuum of steady...
Persistent link: https://www.econbiz.de/10012502955
We study the effects of different tax reporting mechanisms in experi-mental double auction markets in the laboratory. The sales tax is paidby the seller, and we compare market outcomes in a no-tax conditionto cases where (i) tax evasion is impossible, (ii) taxes can be evaded butthere is an...
Persistent link: https://www.econbiz.de/10012503080
Many industrialized countries have recognized the need to mitigate energy cost increases faced by low-income households by fostering the adoption of energy-efficient technologies. How to meet this need is an open question, but “behavioral insights” are likely components of future policy...
Persistent link: https://www.econbiz.de/10015323337
Using a randomized information experiment embedded in a representative survey, we study households' economic expectations at onset of the COVID-19 crisis. Our experimental evidence indicates that households are not fully aware of what is happening in the economy shortly after the pandemic...
Persistent link: https://www.econbiz.de/10015205429
We document a substantial gender gap in China's gender-blind university admissions system: equally qualified female students are less likely to apply and be admitted to elite universities than male students. Leveraging linked administrative and survey data on students' application choices,...
Persistent link: https://www.econbiz.de/10015272999
This paper studies the causal effect of providing information about climate change on individuals' willingness to pay to offset carbon emissions in a randomized control trial. Receiving truthful information about ways to reduce CO2 emissions increases individuals' willingness to pay for CO2...
Persistent link: https://www.econbiz.de/10013326470