College tuition payment and household consumption in Japan

Satoshi Shimizutani

Review of Economics of the Household, 2017, vol. 15, issue 1, No 12, 265-285

Abstract: Abstract Because tuition payment comprises a large proportion of expenses in households with children in universities, it causes large and clearly predictable changes in discretionary income in predetermined months. This study examines consumption smoothing for those households as an alternative test of the life-cycle/permanent income hypothesis, using the Japanese Family Income and Expenditure Survey. We show that a one yen decrease in discretionary income due to tuition payment is associated with 0.1–0.2 yen decrease in non-tuition spending in the month of tuition payment, showing that those households are not engaged in consumption smoothing.

Keywords: Consumption smoothing; Life-cycle/permanent income hypothesis; Tuition payment; Family Income and Expenditure Survey (search for similar items in EconPapers)
JEL-codes: E21 I22 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s11150-014-9257-6

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