Life-Cycle Model and Consumption: Structural Estimation of Precautionary and Life-Cycle Motives (in Japanese)

Naohito Abe () and Tomoaki Yamada

Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: This paper simulates a “buffer-stock” saving model of precautionary saving and estimates the parameters of the utility function by matching the simulated age-consumption profile with those observed in the micro-level data from the Family Income and Expenditure Survey (FIES) in Japan. Our empirical results show that with high degree of patience (small subjective discount rate) and low degree of risk aversion, about 40 % of saving by young consumers is due to the precautionary motives.

Keywords: Precautionary Saving; Structural Estimation (search for similar items in EconPapers)
JEL-codes: C61 D12 E21 (search for similar items in EconPapers)
Date: 2004-08
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:hst:hstdps:d04-37

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