The Permanent Income Hypothesis and Consumption Durability: Analysis Based on Japanese Panel Data
The Quarterly Journal of Economics, 1985, vol. 100, issue 4, 1083-1113
The permanent income hypothesis with durability of commodities is tested on a panel of about 2,000 Japanese households for several commodity groups. Under static expectations about real interest rates and for some class of utility functions, consumption, which is a distributed lag function of current and past expenditure, follows a martingale. Main empirical results are (i) the durability of commodities usually classified as services is substantial, (ii) the hypothesis applies to about 85 percent of the population consisting of wage earners, and (iii) income changes explain only a small fraction of the movements in expenditure.
References: Add references at CitEc
Citations: View citations in EconPapers (86) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: The Permanent Income Hypothesis and Consumption Durability: Analysis Based on Japanese Panel Data (1984)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:oup:qjecon:v:100:y:1985:i:4:p:1083-1113.
Access Statistics for this article
The Quarterly Journal of Economics is currently edited by Robert J. Barro, Elhanan Helpman, Lawrence F. Katz and Andrei Schleifer
More articles in The Quarterly Journal of Economics from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().