Structure of financial savings during Indian economic reforms

Raghbendra Jha and Ibotombi S. Longjam

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: This paper conducts nonparametric tests to examine whether data on financial savings in India can be rationalized in terms of a utility function of a representative economic agent. The nonparametric test has an advantage over its parametric counterpart in that it does not assume the existence of a utility function per se and checks whether the representative consumer’s demand structure can at all be rationalized by a utility function. Our test results of the necessary and sufficient conditions of the weak separability hypothesis suggest that data on financial savings in India are consistent with the existence of a utility function for a representative individual with a sub-preference where contractual savings (insurance and provident funds) can be separated out. This result could facilitate the construction of a suitable financial aggregate using these assets.

Keywords: Non-parametric estimation; financial assets; India (search for similar items in EconPapers)
JEL-codes: E21 E41 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2004-07
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Related works:
Journal Article: Structure of Financial Savings During Indian Economic Reforms (2006)
Working Paper: Structure of Financial Savings during Indian Economic Reforms (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2004-06

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