Showing 1 - 10 of 3,078
Persistent link: https://www.econbiz.de/10001667013
This chapter is concerned with the distribution of personal wealth, which usually refers to the material assets that can be sold in the marketpace, although on occasion pension rights are also included. We summarise the available evidence on wealth distribution for a number of countries. This...
Persistent link: https://www.econbiz.de/10014024198
The purpose of this chapter is to discuss how regulatory focus theory, a theory of motivation and self-regulation, can be drawn upon to explain a variety of consumer decision making phenomena. We briefly review the major tenets of the theory, which proposes a fundamental distinction between two...
Persistent link: https://www.econbiz.de/10014029073
Previous tests for liquidity constraints using consumption Euler equations have frequently split the sample on the basis of wealth arguing that low wealth consumers are more likely to be constrained. We propose alternative tests using different and more direct information on borrowing...
Persistent link: https://www.econbiz.de/10014032922
According to the German SAVE survey, more than 40 percent of households regularly save fixed amounts rather than flexibly adjusting savings to income variations as assumed by the Permanent Income Hypothesis (PIH). Fixed amount saving behaviour could thus imply a challenge to PIH-based standard...
Persistent link: https://www.econbiz.de/10013100891
We study whether households can distinguish persistent from transitory income shocks, and the implications for consumption-saving behavior. We construct a novel consumption-saving model where the household must infer the persistent component of its income process from actual income realizations...
Persistent link: https://www.econbiz.de/10012928282
Various deviations from the Permanent Income consumption model with rational expectations have been discussed in the literature, including loss aversion and liquidity constraints. In the existing literature, these two types of consumption asymmetry are usually considered as mutually exclusive....
Persistent link: https://www.econbiz.de/10003744543
It is shown how one can effectively use cross-section data in modelling the change over time in aggregate consumption expenditure of a heterogeneous population. The starting point of our aggregation analysis is a dynamic behavioral relation on the household level. Based on certain hypotheses on...
Persistent link: https://www.econbiz.de/10011539806
Exponential-growth bias (EGB) is the tendency for individuals to partially neglect compounding of exponential growth. We develop a model wherein biased agents misperceive the intertemporal budget constraint, and derive conditions for overconsumption and dynamic inconsistency. We construct an...
Persistent link: https://www.econbiz.de/10013036519
In this paper, a formal test of intra-household commitment is derived and performed. To that end, two models of household intertemporal behavior are developed. In both models, household members are characterized by individual preferences. In the first formulation, household decisions are always...
Persistent link: https://www.econbiz.de/10014065780