QUASI-GEOMETRIC CONSUMERS: PANEL DATA EVIDENCE

M. Dolores Collado (), Lilia Maliar and Serguei Maliar

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: This paper examines the empirical relevance of an intertemporal model of consumption with dynamically inconsistent decision makers. The model has testable implications concerning the relation between the consumers' degrees of short-run patience (self-control) and their consumption-saving decisions. Using Spanish panel data on household expenditure, we estimate the Euler equation derived from the model. We find evidence in favor of consumers' preferences being time inconsistent. Moreover, our results indicate that there are significant differences in the degrees of short-run patience across households.

Keywords: Time-inconsistency; Quasi-geometric discounting; Hyperbolic discounting; panel data (search for similar items in EconPapers)
JEL-codes: C23 D91 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2003-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2003-09

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