Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/195530 
Year of Publication: 
2016
Citation: 
[Journal:] Quantitative Economics [ISSN:] 1759-7331 [Volume:] 7 [Issue:] 3 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2016 [Pages:] 935-968
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
Conventional estimators based on the consumption Euler equation, intensively used in studies of intertemporal consumption behavior, produce biased estimates of the effect of children on the marginal utility of consumption if consumers face credit constraints. As a more constructive contribution, I propose a tractable approach to obtaining bounds on the effect of children on the marginal utility of consumption. I estimate these bounds using the Panel Study of Income Dynamics and find that conventional estimators yield point estimates that are above the upper bound. Children might, thus, not increase the marginal utility of consumption as much as previously assumed.
Subjects: 
Consumption
Euler equation estimation
credit constraints
children
demographics
life cycle
bounds
JEL: 
D12
D14
D91
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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