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dc.contributor.authorStillman, Stevenen_US
dc.date.accessioned2009-01-28T16:20:55Z-
dc.date.available2009-01-28T16:20:55Z-
dc.date.issued2001en_US
dc.identifier.urihttp://hdl.handle.net/10419/21271-
dc.description.abstractThis paper examines the extent to which consumption in Russian households responds to exogenous income shocks. During the time period studied in this paper (1994 – 1998), Russia experienced two major economic crises. Both featured extreme movements in the real ruble-dollar exchange rate. The price of oil, which is typically thought to have a strong effect on the Russian economy, was also quite volatile during this time period. This paper exploits these large changes in oil prices and exchange rates, as well as community-level variations in wage and pension arrears, to identify exogenous shocks to household income. Using representative panel data on urban households from the Russian Longitudinal Monitoring Survey, I find that a household which experiences an exogenous shock of 10% of its total income changes both its food and total non-durable expenditure by 7-11%. Most evidence indicates that these shocks are transitory in nature and thus the traditional Life Cycle/Permanent Income Hypothesis model is firmly rejected as describing the behavior of Russian households. Additional results indicate that changes in household savings are negatively related to exogenous income shocks, with this relationship strongest for low wealth households. Only models of consumption which include precautionary savings motives can explain why poorer households both reduce their consumption and increase their savings in response to an exogenous decline in income.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesIZA Discussion paper series 411en_US
dc.subject.jelD91en_US
dc.subject.jelO16en_US
dc.subject.jelD12en_US
dc.subject.jelP36en_US
dc.subject.ddc330en_US
dc.subject.keywordConsumptionen_US
dc.subject.keywordsavingsen_US
dc.subject.keywordconsumption smoothingen_US
dc.subject.keywordprecautionary savingsen_US
dc.subject.keywordeconomic shocksen_US
dc.subject.keywordRussiaen_US
dc.subject.stwKonsumentenverhaltenen_US
dc.subject.stwVerbraucherausgabenen_US
dc.subject.stwSchocken_US
dc.subject.stwKonsumtheorieen_US
dc.subject.stwSchätzungen_US
dc.subject.stwRusslanden_US
dc.titleThe Response of Consumption in Russian Households to Economic Shocksen_US
dc.typeWorking Paperen_US
dc.identifier.ppn34695116Xen_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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