The Response of Household Savings to Anticipated Income Changes: Natural Experiments Using Natural and Non-Natural Factors

Aeggarchat Sirisankanan ()
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Aeggarchat Sirisankanan: Mahasarakham University, Thailand

Journal of Economic Development, 2023, vol. 48, issue 2, 1-31

Abstract: This paper aimed to test the response of household savings to anticipated income changes. Using a data matching technique between the Socio-economic Survey (SES) of Thai Agricultural Households and Labor drawn from crop years 2006/2007 and 2007/2008 and the 2006 Survey of the Integrated Management Plan on Saline Soil in the North-eastern Region of Thailand, this paper did natural experiments comprising both natural and non-natural factors as instrumental variables. The results showed that there existed to some extent evidence of excess sensitivity in Thailand. The robustness of the results was confirmed by using three estimators as well as using seven instrumental variables, which were in the form of actual and subjective data.

Keywords: Excess Sensitivity of Consumption; Savings; Natural Events; Saline Soil; Rainfall Variation; Anticipated Income Changes (search for similar items in EconPapers)
JEL-codes: J22 O12 O13 (search for similar items in EconPapers)
Date: 2023
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