publication . Research . Article . Preprint . 2006

Intertemporal Choice and Consumption Mobility

Tullio Jappelli; Luigi Pistaferri;
Open Access English
  • Published: 01 Mar 2006
  • Publisher: Frankfurt a. M.: Goethe University Frankfurt, Center for Financial Studies (CFS)
  • Country: Italy
Abstract
We test the validity of three models of intertemporal consumption choice (the permanent income hypothesis, the myopic model, and the consumption insurance model) by means of mobility indexes for the underlying consumption distribution. Each of the three models delivers different transition laws for the consumption distribution. Estimating the transition laws requires knowledge of the evolution of the entire consumption distribution, not just of the conditional mean of consumption growth as in more standard procedures. We design an appropriate non-parametric test and confront these yet unexplored theoretical predictions with a panel drawn from the Bank of Italy S...
Subjects
free text keywords: D52, D91, I30, Consumption Dynamics, Mobility, Gesamtwirtschaftlicher Konsum, Soziale Mobilität, Schätzung, Italien, General Economics, Econometrics and Finance, Consumption Dynamics,Mobility, Consumption dynamics, mobility, ddc:330, Consumption distribution, Stochastic matrix, Consumption function, Microeconomics, Economics, Household income, Intertemporal consumption, Permanent income hypothesis, Autonomous consumption, Intertemporal choice, jel:D52, jel:D91, jel:I30
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