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Is Consumption Growth Consistent with Intertemporal Optimization? Evidence for the Consumer Expenditure Survey (1995)
| Venue: | Journal of Political Economy |
| Citations: | 314 - 18 self |
BibTeX
@ARTICLE{Attanasio95isconsumption,
author = {Orazio P. Attanasio and Guglielmo Weber},
title = {Is Consumption Growth Consistent with Intertemporal Optimization? Evidence for the Consumer Expenditure Survey},
journal = {Journal of Political Economy},
year = {1995},
pages = {1121--1157}
}
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Abstract
In this paper we show that some of the predictions of models of consumer intertemporal optimization are in line with the patterns of nondurable expenditure observed in U.S. household-level data. We propose a flexible specification of preferences that allows multi-ple commodities and yields empirically tractable equations. We esti-mate preference parameters using the only U.S. micro data set with complete consumption information. We show that previous rejec-tions can be explained by the simplifying assumptions made in previ-ous studies. We also show that results obtained using good consump-tion or aggregate data can be misleading. I.
Keyphrases
consumption growth consistent consumer expenditure survey intertemporal optimization consumer intertemporal optimization previ-ous study good consump-tion nondurable expenditure u.s. micro data tractable equation simplifying assumption previous rejec-tions esti-mate preference parameter multi-ple commodity flexible specification complete consumption information u.s. household-level data
