We review different empirical approaches that researchers have taken to estimate how consumption responds to income … changes. We critically evaluate the empirical evidence on the sensitivity of consumption to predicted income changes …, distinguishing between the traditional excess sensitivity tests and the effect of predicted income increases and income declines. We …

Many scholars have argued that once "basic needs" have been met, higher income is no longer associated with higher in … about well-being, we find no support for this claim. The relationship between well-being and income is roughly linear …

income than to rises of the same size. Household balance sheet characteristics (including the presence of a savings buffer …), concerns about credit market access and higher subjective risk of lower future income account for a sizable share of this …