Download or read book Essays on Households Consumption and Saving Decisions written by Serafin Frache Derregibus and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Household Consumption written by Matias Felix Barenstein and published by . This book was released on 2004 with total page 374 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Saving Bequests Altruism and Life cycle Planning written by Laurence J. Kotlikoff and published by MIT Press. This book was released on 2001-06-22 with total page 596 pages. Available in PDF, EPUB and Kindle. Book excerpt: This collection of essays, coauthored with other distinguished economists, offers new perspectives on saving, intergenerational economic ties, retirement planning, and the distribution of wealth. The book links life-cycle microeconomic behavior to important macroeconomic outcomes, including the roughly 50 percent postwar decline in America's rate of saving and its increasing wealth inequality. The book traces these outcomes to the government's five-decade-long policy of transferring, in the form of annuities, ever larger sums from young savers to old spenders. The book presents new theoretical and empirical analyses of altruism that rule out the possibility that private intergenerational transfers have offset those by the government.While rational life-cycle behavior can explain broad economic outcomes, the book also shows that a significant minority of households fail to make coherent life-cycle saving and insurance decisions. These mistakes are compounded by reliance on conventional financial planning tools, which the book compares with Economic Security Planner (ESPlanner), a new life-cycle financial planning software program. The application of ESPlanner to U.S. data indicates that most Americans approaching retirement age are saving at much lower rates than they should be, given potential major cuts in Social Security benefits.

Download or read book Three Essays on the Geography of Household Consumption Decisions written by Jose Maria Casado Garcia and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Consumption and Saving written by Robert Allen Vergun and published by . This book was released on 1993 with total page 208 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays in the Microeconomics of Savings and Consumption written by Joshua Junshik Kim and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation, "Three Essays in the Microeconomics of Savings and Consumption", is comprised of three chapters which together, focus on how low-income communities and households living in the developing world make important savings and consumption decisions. The first chapter, titled "Currency Depreciations and Savings Behavior: Evidence from Household Deposits in Armenia", is co-authored with Diego Jimenez-Hernandez and Aleksandr Shirkhanyan. In this chapter, I study how households living in financially dollarized economies make currency and savings decisions following a significant currency depreciation. Those living in the developing world often face the problem of how to safely store their assets when the value of their local currency is unstable. This instability leads to several complicated decisions households must make, such as how much to save and which currencies to save in. These choices are especially important for households during periods of macroeconomic volatility such as currency depreciations. This chapter studies how households make such savings decisions following a large currency depreciation in Armenia. We exploit the unique structure of Armenian financial instruments, which generates quasi-random variation in which savers are nudged into paying attention to the depreciation. We then study how this random difference in initial attention affects the future savings choices that individuals make. Using a differences-in-differences design, we find that individuals who received a nudge to pay attention to the currency depreciation significantly reduced their total savings, held their savings for shorter periods of time, and chose to save their assets in USD. We find that these effects are strongest for individuals who predominantly saved their in the domestic currency and individuals who are less financially sophisticated. We also find that while some of the differences in savings decisions are temporary, others persist long after the original depreciation event. The second chapter, "Are High-Interest Loans Predatory? Theory and Evidence from Payday Lending", evaluates the welfare impacts of payday loans and payday lending regulation. It is often argued that consumer lending regulations can increase welfare, because high-interest loans cause "debt traps" where people borrow more than they expect or would like to in the long run. We test this using an experiment with a large payday lender. While the most inexperienced quartile of borrowers underestimate their likelihood of future borrowing, the more experienced three quartiles predict correctly on average. This finding contrasts sharply with priors we elicited from 103 payday lending and behavioral economics experts, who believed that the average borrower would be highly overoptimistic about getting out of debt. Borrowers are willing to pay a significant premium for an experimental incentive to avoid future borrowing, implying that they perceive themselves to be time-inconsistent. We combine these data with a novel sufficient statistic-based identification strategy to estimate a a structural model of time preferences and beliefs. Using our estimated parameters, we carry out a behavioral welfare evaluation of common payday lending regulations. In our model, payday loan bans unambiguously reduce welfare, and limits on repeat borrowing generate at best small welfare gains. The last chapter, "Food Labeling: Effects on Supply and Demand", studies front of package labeling regulations. Front-of-package labeling (FoPL) regulations are an increasingly popular policy used to combat obesity. FoPLs place warning stickers on food products which are deemed to be unhealthy. However, the welfare consequences of FoPL regulations are ambiguous; while firms may produce healthier foods to avoid receiving a label, they may also increase prices due to higher production costs and increased product differentiation. We study how FoPL regulations impact consumer surplus and nutritional intake in the context of Chile, which passed a nationwide regulation mandating FoPL stickers on all processed food products which surpass a threshold level of critical nutrients such as calories or sugar. Combining detailed scanner-level data from Walmart and field-collected data on products' nutritional content and consumers beliefs, we find a decrease in sugar and caloric intake by 9% and 7% respectively. We find that consumers shifted demand from labeled to unlabeled products, and this substitution is highest for products which consumers had miscalibrated nutritional beliefs about. On the supply side, we find firms bunch the nutritional composition of their products at the regulatory thresholds to avoid receiving a label. We develop and estimate a model of supply and demand for food and nutrients, and find that accounting for strategic responses from firms increases the effect of FoPL regulations on nutritional intake by 20 to 30 percent. Finally, we compare FoPL with sin taxes.

Download or read book Essays in Optimal Consumption and Portfolio Choice written by Jialun Li and published by . This book was released on 2012 with total page 114 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Public Finance and Household Lifecycle Behavior written by Francesca Parodi and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This PhD thesis investigates the impact of direct and indirect taxation on households" consumption, saving and labor supply decisions over the life cycle. Chapter 1 focuses on indirect taxation. A dynamic model of households saving, durable and non-durable consumption decisions in a context of income uncertainty and borrowing constraints is set up. A novel feature of the model is the consistent integration of an intratemporal static demand analysis for different categories of non-durables - necessities and luxuries - with an intertemporal dynamic model for durables and savings. Simulated counterfactuals based on the estimated model show that revenue neutral reforms changing value added tax rates towards uniformity would be welfare improving, however, they would redistribute in favor of the wealthiest groups. Chapters 2 and 3 analyze direct and indirect taxation jointly. Chapter 2 extends the model in Chapter 1 by allowing for endogenous labor supply decisions, heterogeneous preferences and uncertainty in family dynamics. The model is estimated on micro-data and its rich structure is shown to be crucial in reproducing the empirical patterns of households" life cycle economic behavior. Marshallian elasticities are then simulated along several dimensions and show that the model accounts for mechanisms of interaction between households" economic behavior and the tax system that have not been considered together in previous studies. Chapter 3 applies the model of Chapter 2 to conduct a quantitative normative analysis. Under a utilitarian framework, it is found that durables should be subsidized in presence of pre-commitment and uncertainty and that the optimal combination of taxes on non-durables and labor income crucially depends on the degree of preference heterogeneity. Allowing for a generalized social welfare criterion with varying degrees of government inequality aversion, it is shown that the model can rationalize the tax systems observed in reality.

Download or read book Essays on Household Saving Rates written by Yi Chen and published by . This book was released on 2015 with total page 177 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is devoted to understanding household saving rates of the two largest countries in the world - China and the United States. The first two chapters explain why the Chinese elderly save at extraordinarily high rates and the third chapter explains why the U.S. personal saving rate has been falling since 1980's. Chapter 1 explores the potential explanation of the high saving rates of the Chinese elderly. The high saving rate of China has attracted global attention. Furthermore, the saving rates of the Chinese elderly are especially high. Understanding why the elderly in China save at high rates is important for two reasons: (1) it partially explains the high aggregate saving rate in China, and (2) the fact that the elderly save more than the middle-aged contradicts the predictions of the life-cycle model. In this chapter, I present evidence that pension income is the primary explanation for the high saving rates of elderly Chinese households. I provide this evidence in two steps. First, I document three stylized facts that are consistent with this hypothesis: (1) saving rates are higher in years with higher pensions, (2) saving rates are higher for those with more generous pension plans, and (3) policy reforms that exogenously increase pensions also increase saving rates. However, a higher pension income on its own cannot explain the entire pattern because a household can simultaneously adjust its consumption. Therefore, in the second step, I demonstrate that concerns regarding future medical expenditures and bequest motives can explain why households do not increase their consumption commensurate with increases in pension income. In Chapter 2, I build and estimate a dynamic life cycle model for two purposes. The first is to quantify the effect of pension income. The second purpose is to carry out counterfactual policy simulations. The model is a standard life-cycle model with three main components. First, pension income is properly modeled to capture the increase observed in the data. The second part of the model is about uncertainty. In the model, I cover income uncertainty, health status and medical expenditures as the main source of uncertainty for the elderly. Finally, individuals have bequest motives. I estimate the model using the method of simulated moments. The estimation results show that it is possible to match the data with reasonable parameters. It is noteworthy that the estimated degree of relative risk aversion for the Chinese elderly is similar to that of U.S. population in other studies. This implies when factors including pension income, medical expenditures and bequest motives are properly taken into account, it is not necessary to assume Chinese elderly to be highly risk averse to explain their high saving rates. With the model, I am able to carry out various policy simulations. The most interesting simulation is if the Chinese pension and economy growth rate becomes similar to those in the United States, the saving rates of the Chinese elderly will fall to the level of the U.S. Chapter 3 is a joint work with Maurizio Mazzocco and Bela Szemely. In this chapter we provide evidence that most of the decline in the U.S. personal saving rate from 9 percent in the early eighties to 2 percent in 2007 can be explained by the steep increase in health expenditure experienced by the U.S. economy during the same period. The most convincing evidence is provided using the FDA approval of new drugs as a source of exogenous variation in medical expenses. Employing this source of variation, we find that a $1$ percentage point increase in health expenditure generates a decline in the U.S. saving rate that is between $0.58$ and $0.67$ percentage points. Using this result, we calculate that the rise in health expenditure explains about 83 percent of the drop in the U.S. saving rate. To evaluate whether households changed their consumption decisions to mitigate the effect of higher medical expenses, we develop a stylized model of household's and government's decisions. Using the model jointly with our empirical results, we find that the households' response to the rise in health expenses was negligible. This is why the saving rate dropped by a significant amount. Finally, with the objective of better understanding why households did not respond, we provide evidence on how the increase in medical expenditure was funded. We find that it was paid almost exclusively by an increase in government debt, a reduction in other government expenses, and an increase in employer contributions to health funds. The main implication of these findings is that the households were barely affected by the rise in health expenditure. The households' negligible response was, therefore, rational.

Download or read book Essays on Household Consumption and Income Underreporting written by Merike Kukk and published by . This book was released on 2016 with total page 173 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Household Consumption and Income Underreporting written by Merike Kuuk and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on the Economics of Household Decision Making written by Vipul Bhatt and published by . This book was released on 2010 with total page 95 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: My research emphasizes the role of interrelated preferences in determining economic choices within a household. In this regard, I study both intergenerational interactions (between parents and children) and intragenerational interactions (between spouses). These linkages have important implications on individual economic behavior such as savings, labor supply, investment in human capital, and bequests which in turn affects aggregate savings and growth.

Download or read book Smoothing Consumption Across Households and Time written by Cynthia Georgia Kinnan and published by . This book was released on 2010 with total page 163 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis studies two strategies that households may use to keep their consumption smooth in the face of fluctuations in income and expenses: credit (borrowing and savings) and insurance (state contingent transfers between households). The first chapter asks why insurance among households in rural Thai villages is incomplete. The second chapter analyzes the impacts of micro-credit. The third chapter examines the interaction between interpersonal insurance and access to savings. The first chapter is motivated by the observation that interpersonal insurance within villages is an important source of insurance, yet consumption, while much smoother than income, is not completely smooth. That is, insurance is incomplete. This chapter attempts to identify the cause of this incompleteness. Existing research has suggested three possibilities: limited commitment-the inability of households to commit to remain within an insurance agreement; moral hazard-the need to give households incentives to work hard; and hidden income-the inability of households to verify one another's incomes. I show that the way in which "history" matters can be used to distinguish insurance constrained by hidden income from insurance constrained by limited commitment or moral hazard. This history dependence can be tested with a simple empirical procedure: predicting current marginal utility of consumption with the first lag of marginal utility and the first lag of income, and testing the significance of the lagged income term. This test is implemented using panel data from households in rural Thailand. The results are consistent with insurance constrained by hidden income, rather than limited commitment or moral hazard. I test the robustness of this result to measurement error using instrumental variables and by testing over-identifying restrictions on the reduced form equation for consumption. I test robustness to the specification of the utility function by nonparametric ally estimating marginal utility. The results suggest that constraints arising from private information about household income should be taken into account when designing safety net and other policies. My second chapter (co-authored with Abhijit Banerjee, Esther Duflo and Rachel Glennerster) uses a randomized trial to analyze the impacts of micro credit in urban South India. We find that more new businesses are created in areas where a micro credit branch opens. Existing business owners increase their spending on durable goods but not non-durable consumption. Among households that did not have a business before the program began, those with high estimated propensity to start a business reduce non-durable consumption and increase spending on durables in treated areas. Those with low estimated propensity to start a business increase non-durable consumption and spend no more on durables. This suggests that some households use micro credit to pay part of the fixed cost of starting a business, some expand an existing business, and others pay off more expensive debt or borrow against future income. We find no effects on health, education, or women's empowerment. My third dissertation chapter (co-authored with Arun Chandrasekhar and Horacio Larreguy) is motivated by the observation that the ability of community members to insure one another may be significantly reduced when community members also have the ability to privately save some of their income. We conducted a laboratory experiment in rural South India to examine the impact of savings access on informal insurance. We find that transfers between players are reduced when savings is available, but that, on average, players smooth their consumption more with savings than without. We use social network data to compute social distance between pairs, and show that limited commitment constraints significantly limit insurance when risk-sharing partners are socially distant, but not when pairs are closely connected. For distant pairs, access to savings helps to smooth income risk that is not insured interpersonally.

Download or read book Three Essays on Household Saving and Wealth written by Kyeongwon Yoo and published by . This book was released on 2003 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Labor Economics written by and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies individuals' or households' life-time decisions about consumption/saving and working behavior. It consists of the following three chapters. The first chapter investigates the role/influence of age and number of children on retirement. The goal is to examine if the change in the timing of childbirth is the cause of the increasing labor force participation rate of older men since the mid-1990s in the United States. A life-cycle model with family size is estimated by using US data for this goal. I found that the observed increase in the labor force participation of older men in the mid-1990s cannot be explained only by referring to this effect. The second chapter proposes and estimates a structural model of screening by employer-provided pension. The model can explain why firms have pension plans and why workers with pension plans earn more and stay longer with their employer than those without pension. In the model, employer-provided pensions play the role of a screening device. I estimate the screening model by using U.S. data. Our estimation and simulation results clearly illustrate how workers are sorted into jobs with pension and without pension according to their time preferences and human capital levels. Using two household surveys for Japan, the third chapter investigates whether the saving rates of households with higher lifetime income are higher than those of households with lower lifetime income. We construct a number of proxies for lifetime income from the two surveys. While the estimated relationships between saving rates and lifetime income are sensitive to the choice of lifetime income measure, the patterns observed for working age households in Japan are generally consistent with those reported for Western countries: we find significant positive correlations when we use education and the type of occupation as instruments, while the positive correlations disappear when we use consumption measures as alternative instruments.

Download or read book ESSAYS ON PORTFOLIO CHOICE AND HEALTH OVER THE LIFE CYCLE written by You Du and published by . This book was released on 2021 with total page 97 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation examines the effect of health and its associated variables on households' consumption and portfolio choices over life cycle. The first two essays constitute my job market paper, which explains why the risky portfolio share rises in wealth from two health mechanisms: endogenous health investment and medical expenditure risk. The third chapter explores the effect of health and health risk on households' optimal consumption and portfolio decisions over life cycle. Chapter 1 titled ``PORTFOLIO CHOICE AND HEALTH ACROSS WEALTH: EMPIRICAL EVIDENCE" illustrates the empirical relationship between the portfolio puzzle and the heterogeneity of health variables across wealth. Classic financial theory suggests that under the assumption of no borrowing constraints and no mean-reverting stock returns, households should hold a constant risky portfolio in spite of their wealth, ages and life horizons (Samuelson (1969) and Merton (1969, 1971)). Yet data from the Survey of Consumers Finances (SCF) show that the risky portfolio share of financial assets increases in wealth. In the literature, this is called the ``portfolio puzzle". Meanwhile, various sources of data indicate that, compared with the non-wealthy households, the wealthy people have better health, longer life horizon, higher out of pocket medical spending with lower uncertainty, and more health care time. All these facts suggest a novel correlation between the portfolio puzzle and the heterogeneity of health variables across wealth and provide a robust empirical foundation to explain the portfolio puzzle from a health perspective. In Chapter 2 titled ``A LIFE CYCLE MODEL OF PORTFOLIO CHOICE AND HEALTH", a life cycle model with endogenous health investment and medical expenditure risk is proposed to capture the key empirical features in the first chapter. This calibrated model remarkably matches the U.S. data. I find that endogenous health investment is essential to explain the portfolio puzzle: if health is exogenous without investment, the model can only could deliver 7.2% of the risky share gap across wealth. Medical expenditure risk is less important and has a larger effect on the non-wealthy group. If I abstract from medical expenditure risk, the risky shares increase for both groups: 24% for the low wealth group and 5% for the wealthy group. This life cycle model provides new insights into how health affects households' financial behavior. Chapter 3 titled ``OPTIMAL CONSUMPTION AND PORTFOLIO CHOICE WITH HEALTH RISK" investigates the effect of health and health risk on households' optimal consumption and portfolio allocations over the life cycle. The simulation results show that consumption, savings in bonds, and savings in stocks all increase with health. The risky portfolio share, which is the ratio of savings in stocks to the total financial assets, demonstrates the same tendency for both health states over the life cycle: at the very young age, the risky portfolio share is relatively high. Starting from the middle age, this share falls significantly and keeps steady until the end of life. For most of the lifetime, the risky portfolio share is positively related with health. These results emphasize the importance of health and its associated risk in consumption and portfolio decisions.

Download or read book Essays in Macroeconomics of an Open Economy written by Franz Gehrels and published by Springer. This book was released on 1991-06-19 with total page 183 pages. Available in PDF, EPUB and Kindle. Book excerpt: The large aggregates in the economy - consumption, investment, production of the domestic and the international sectors, international capital flows, financial accumulation and indebtedness - are analysed in this book as problems in time-optimisation for enterprises and households. The effects of fiscal and monetary policies along with exchange-rate variation are examined, and their simultaneous use for stabilizing demand are found to be necessary. All household decisions on consumptions, savings, and financial disposition are conditioned by uncertainty, and similarly for firms, who make more complex simultaneous decisions on production, real investment, financing, and market strategy. The marginal efficiency-of-investment function derived from these decisions is fundamentally different from the marginal productivity of capital in the neoclassical sense. An economy which grows through the accumulation of capital, increase in labor supply, and technological progress is the framework in which all of these variables move. This codetermines the allocation of factors between domestic and international production, and the development of foreign trade. The growth both of the public debt and of international investment are treated in depth.