Precautionary Motives versus Waiting Options: Evidence from Aggregate Household Saving in Japan

Makoto Saito and Shigenori Shiratsuka ()

Monetary and Economic Studies, 2003, vol. 21, issue 3, 1-20

Abstract: Exploiting theoretical implications for saving motives under uncertainty proposed by Epstein (1980), this paper empirically examines which motive is more dominant in aggregate household savings in Japan, precautionary savings or savings as waiting options. The former motive is driven by the magnitude of risks, while the latter is promoted by the subsequent resolution of uncertainty. Empirical results indicate that saving behavior since the 1980s is more consistent with precautionary savings; however, estimation results from the behavior during the 1990s offer some evidence in favor of savings as waiting options.

JEL-codes: D14 D91 E21 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (7)

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