Habit formation in household consumption: evidence from Japanese panel data

Koichiro Iwamoto

Economics Bulletin, 2013, vol. 33, issue 1, 323-333

Abstract: Habit formation in consumption has important implications for the effects of macroeconomic policies. Using micro data from the Japanese Panel Survey of Consumers (JPSC) for the period 1998-2004, an Euler equation à la Dynan (2000) allowing for time-nonseparablity in consumer preferences is estimated. In contrast to previous, macro data-based studies on consumption in Japan, the estimates yield no evidence of habit formation and appear consistent with durability in consumption.

Keywords: household consumption; habit formation; panel data (search for similar items in EconPapers)
JEL-codes: D1 E2 (search for similar items in EconPapers)
Date: 2013-02-08
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Citations: View citations in EconPapers (1)

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