Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/78397
Authors: 
Jang, Insong
Year of Publication: 
2001
Series/Report no.: 
Bonn Econ Discussion Papers 7/2001
Abstract: 
Modern consumer theories are built upon the premise of the forward looking behavior of households. While most of the empirical studies at micro level are based on Euler equation, there have been few to estimate the household consumption function and test the implication of forward looking behavior directly. One of the main difficulties is that forward looking behavior involves such variables as human wealth and income uncertainty which are not directly observable. This paper exploits the rotating panel feature of Consumer Expenditure Survey to construct the proxies and test significance of them in the household consumption function. We fail to find evidence to support forward looking behavior over long horizon.
Subjects: 
Consumption Function
Uncertainty
Human Wealth
JEL: 
D12
D91
E21
Document Type: 
Working Paper

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