Standard applications of the consumption-based asset pricing model assume that goods and services within the nondurable … consumption bundle are substitutes. We estimate substitution elasticities between different consumption bundles and show that … households cannot substitute energy consumption by consumption of other nondurables. As a consequence, energy consumption affects …

This paper aims to test the microfoundations of consumption models and quantify the macro implications of heterogeneity … in consumption behavior. We propose a new empirical method to estimate the sensitivity of consumption to permanent and … sensitive to income shocks than those who stand to gain. Following a 1 percentage point rate increase, we estimate consumption …

Uninsurable income risk is often cited as an explanation for empirical deviations from the Lifecycle …/Permanent-Income Hypothesis such as the hump-shaped lifecycle profile of mean consumption. In this paper, we solve a lifecycle consumption model … generate a consumption hump similar to what is observed in the data with a peak around age 55. We also notice that the …

In the present paper it will be shown empirically that risk at poverty has a negative impact on household consumption …

Utilizing the asset pricing framework, we justify S-shaped consumption utility functions by reconciling realized … consumption with asset returns. The S-shaped consumption utility predicts a possible negative correlation between asset returns … and lower quantiles of consumption growth, for which we find evidence from micro-level data. This evidence refutes a …

saving motive by eliciting subjective expectations on future consumption. We find that expected consumption risk is higher … estimate the degree of prudence by associating expected consumption risk with expected consumption growth. Robust OLS and IV … for the young and the self-employed, and is correlated positively with income risk. We insert these subjective …

saving motive by eliciting subjective expectations on future consumption. We find that expected consumption risk is higher … estimate the degree of prudence by associating expected consumption risk with expected consumption growth. Robust OLS and IV … for the young and the self-employed, and is correlated positively with income risk. We insert these subjective …