A Microeconometric Model of Intertemporal Substitution and Consumer Demand

Richard Blundell (r.blundell@ucl.ac.uk), Martin Browning and Costas Meghir

No 268358, Economic Research Papers from University of Warwick - Department of Economics

Abstract: In this paper we investigate the relationship between within-period preferences and the degree of intertemporal substitution. We first present a theoretical discussion which argues that the form of within-period preferences and the way these differ across consumers may have important consequences for the formulation and specification of intertemporal models. We then apply this methodology to a detailed study of disaggregate household expenditure patterns using a pooled cross-section of some 70,000 households across 15 years. Our objective is to assess the degree of intertemporal substitution across different household types avoiding aggregation bias and accounting for nonadditive within-period preferences and nonlinearity in Engel curves.

Keywords: Consumer/Household Economics; Demand and Price Analysis; Financial Economics (search for similar items in EconPapers)
Pages: 38
Date: 1989-08-08
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: A MICROECONOMETRIC MODEL OF INTERTEMPORAL SUBSTITUTION AND CONSUMER DEMAND (1989)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:268358

DOI: 10.22004/ag.econ.268358

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