This paper focuses on the role of habit formation in individual preferencesover consumption and saving. We closely relate to Alessie and Lusardi's(1997) model as we estimate a model which is based on their closed-formsolution, where saving is expressed as a function of lagged saving and...

This paper focuses on the role of habit formation in individual preferencesover consumption and saving. We closely relate to Alessie and Lusardi's(1997) model as we estimate a model which is based on their closed-formsolution, where saving is expressed as a function of lagged saving and...

In this paper, we conduct a dynamic panel analysis of the determinants of the household saving rate in China using a life cycle model and panel data on Chinese provinces for the 1995-2004 period from China's household survey. We find that China's household saving rate has been high and rising...

The model of time-inconsistent procrastination by O'Donoughe and Rabin shows that individuals who are not aware of their present-bias (naïve) procrastinate more than individuals who are aware of it (sophisticated) or are not present-biased (time-consistent). This paper tests this prediction. We...

We solve a rich life-cycle model of household decisions involving consumption of perishable goods and housing services, habit formation for housing consumption, stochastic labor income, stochastic house prices, home renting and owning, stock investments, and portfolio constraints. In line with...

We show that limited attention and present bias contribute to low levels of exercise. First, in a large randomized experiment, we find that email reminders increase gym visits by 13 % and that they benefit nearly all types of individuals. Limited attention can explain these effects. Second,...

Does it make us unhappier when we compare our current consumption with that of the Joneses or our own past achievements? This paper tries an answer without recurring on interpersonal utility comparisons. It calibrates an economy under three different assumptions, non-comparing utility, and...