Revisiting the Determinants of Consumption: A Bayesian Model Averaging Approach

Pinar Deniz () and Thanasis Stengos
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Pinar Deniz: Department of Economics, Marmara University, Istanbul 34722, Turkey

JRFM, 2023, vol. 16, issue 3, 1-13

Abstract: This study revisits the widely researched area of the consumption function using Bayesian Model Averaging (BMA) for a panel of EU countries to deal with the uncertainty of potential determinants, using the convergence club analysis to construct homogeneous groups by income. BMA suggests that income is the only variable that is found to be a strong determinant across different country groups, whereas other variables have varying importance for different country groups.

Keywords: consumption function; bayesian model averaging (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
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