Identifying the depreciation rate of durables from marginal spending responses

Jin Cao, Chao Cui, Valeriya Dinger, Martin Holm and Shulong Kang

No 2022/1, Working Paper from Norges Bank

Abstract: This paper presents a novel method to estimate the depreciation rate of durable goods using a combination of identified marginal and average spending shares. We apply our method to Chinese spending responses to disposable income changes induced by monetary policy in 2008-2009. The marginal spending response is 0.40. Durable goods make up about 45% of this marginal spending response. By combining this marginal spending share on durables with an average spending share of 14%, we estimate the annual depreciation rate of durables in China to be 0.16.

Keywords: Consumption; Durables; Monetary Policy (search for similar items in EconPapers)
JEL-codes: E21 E52 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2022-01
New Economics Papers: this item is included in nep-cna and nep-tra
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https://hdl.handle.net/11250/2978669

Related works:
Journal Article: Identifying the Depreciation Rate of Durables from Marginal Spending Responses (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:bno:worpap:2022_1

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