New evidence on excess sensitivity of household consumption

Shawn Ni () and Youn Seol ()

Journal of Monetary Economics, 2014, vol. 63, issue C, 80-94

Abstract: The monthly salaries and allowances of Korean government employees are known in advance but vary greatly throughout the year. Using a Korean monthly panel data set, the present study examines how nondurable consumption expenditures in households headed by government employees respond to predictable income changes. The study finds a moderate excess sensitivity in consumption that can be attributed to about 9% of the households. Further analysis shows that these 9% of the households have lower ‘committed expenditures’ and are likely inattentive consumers.

Keywords: Household consumption; Excess sensitivity; Committed expenditures (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:63:y:2014:i:c:p:80-94

DOI: 10.1016/j.jmoneco.2014.01.004

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