The evolution of consumer preferences in Poland

Paweł Marcin Pońsko

Applied Economics Letters, 2018, vol. 25, issue 4, 290-295

Abstract: This note investigates a change of consumer preferences in Poland in the period of 1996–2016. I use the Euler equation–generalized method of moments (GMM) to estimate the structural parameters of the aggregate consumption function to show that consumers in Poland significantly change their attitude to risk during the global financial crisis, when the estimate of the risk-aversion parameter becomes very high, while otherwise close to zero suggesting near risk neutrality. Also, the subjective trade-off between consumption today and tomorrow undergoes an evolution towards lower ‘impatience’. Over-identifying restrictions are tested and the null hypothesis of validity of instruments is not rejected. The stability over time of the estimated parameters is tested and rejected. The evolution of preferences is shown through recursive estimates of the deep parameters, too.

Date: 2018
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DOI: 10.1080/13504851.2017.1319549

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