 James Duesenberry as a practitioner of behavioral economicsJournal of Behavioral Economics for Policy, 2018, vol. 2, issue 1, 13-18 Abstract: In 1949 James Duesenberry published "Income, saving and the theory of consumer behavior". His objective was to solve a puzzle presented by the macroeconomic data on consumption. To do so, he created the Relative Income Hypothesis. Duesenberry explicitly challenged the neoclassical assumption of independent consumer preferences and made use of ideas that are now common in behavioral economics: loss aversion, status quo bias, spotlight effects, herd behavior, and interdependent preferences. He also raised policy questions about the effect of redistributive taxes on national saving. To answer the questions he raised, we need empirical research by behavioral economists. Finally, the issue arises as to why the Relative Income Hypothesis has virtually disappeared from economics even though it is superior to the Permanent Income Hypothesis that replaced it. Keywords: Duesenberry; Relative Income Hypothesis; independent preferences; saving (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:beh:jbepv1:v:2:y:2018:i:1:p:13-18 Access Statistics for this article Journal of Behavioral Economics for Policy is currently edited by Michelle Baddeley More articles in Journal of Behavioral Economics for Policy from Society for the Advancement of Behavioral Economics (SABE) Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.