EconPapers    
Economics at your fingertips  
 

An experimental test on dynamic consumption and lump-sum pensions

Enrique Fatas, Juan Lacomba (), Francisco Lagos () and Ana Moro-Egido ()

SERIEs: Journal of the Spanish Economic Association, 2013, vol. 4, issue 4, 393-413

Abstract: This article examines the potential risks on consumption behavior of lump-sum payments. As a pension, lump-sum payments could be consumed too fast and generate an increase of poverty rates. We experimentally investigate consumption behavior in an inter-temporal decision-making setting. Subjects make consumption and saving decisions in an environment with two central features: first, there exists a decreasing probability of survival; and second, in addition to the regular income they get while active, they receive a unique lump-sum payment when retired. The results of this experiment show that rather than consuming too much during their income periods, subjects show a persistent precautionary saving behavior and over-save in the vast majority of periods. This result seems to be mainly driven by the risk averse individuals. Copyright The Author(s) 2013

Keywords: Experimental test; Consumption; Savings; Lump-sum payment; C91; H55; J26 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1007/s13209-013-0098-y (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:series:v:4:y:2013:i:4:p:393-413

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/13209

DOI: 10.1007/s13209-013-0098-y

Access Statistics for this article

SERIEs: Journal of the Spanish Economic Association is currently edited by Nezih Guner

More articles in SERIEs: Journal of the Spanish Economic Association from Springer, Spanish Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2022-01-01
Handle: RePEc:spr:series:v:4:y:2013:i:4:p:393-413