Economics at your fingertips  

The role of household debt heterogeneity on consumption: Evidence from Japanese household data

Jouchi Nakajima

Economic Analysis and Policy, 2020, vol. 65, issue C, 186-197

Abstract: This paper estimates the impact of household debt on consumption behavior using data from the Japanese Preference Parameters Study. The survey features responses to forward-looking questions about key risks to income, shedding light on the motives for household savings behavior. The analysis finds that household income elasticity of consumption is significantly higher for highly-indebted Japanese households than for those with little-to-no debt, and furthermore it is only significant for negative income changes. The evidence points to a significant precautionary saving motive by Japanese households, with savers particularly concerned about unlikely future unemployment spells and longevity risks.

Keywords: Consumption; Household debt; Precautionary saving motive (search for similar items in EconPapers)
JEL-codes: D14 D81 D84 E21 G11 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.eap.2020.01.003

Access Statistics for this article

Economic Analysis and Policy is currently edited by Clevo Wilson

More articles in Economic Analysis and Policy from Elsevier
Bibliographic data for series maintained by Haili He ().

Page updated 2020-06-13
Handle: RePEc:eee:ecanpo:v:65:y:2020:i:c:p:186-197