Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/56678
Authors: 
Xie, Runli
Year of Publication: 
2010
Series/Report no.: 
SFB 649 discussion paper 2010-057
Abstract: 
This paper studies the link between group-specific consumption growth and volatility within a framework of heterogeneous agents, under the assumption of a consumption externality. Household preferences are related to the volatility through asset holding decisions: volatility decreases with groups' degree of patience, and increases with household eagerness to keep up with the group average. Moreover, consumption growth is expected to relate positively to the volatility. This last hypothesis is tested using household data imputed from GSOEP and the German Income and Expenditure Survey (EVS), where a U-shaped relationship is found for the nondurable consumption. Moreover, examining the growth-inequality relationship using EVS data alone shows that it is positive for nondurable and negative for durable consumption.
Subjects: 
consumption growth
consumption volatility
within-group inequality
GSOEP
EVS
JEL: 
E21
D91
D31
D64
Document Type: 
Working Paper

Files in This Item:
File
Size
865.91 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.