Time Preference and the Great Depression: Evidence from Firewood Prices in Portland, Oregon

Nicholas Muller

No 25997, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The present study gathers prices for firewood and estimates the premium paid for dry fuel, relative to green wood, on a monthly basis from 1922 to 1935. This premium conveys consumers’ willingness-to-pay for a good available for immediate consumption relative to the same good ready for use after roughly one year. Embedded in this premium are consumers’ time preferences. The paper documents time series variation in the dry fuel premium and associated time preference spanning the macroeconomic shocks before, during, and after the Great Depression. The dry fuel premium increased by a factor of four during the recession of 1923 to 1924, and fell by a factor of two following the Great Crash of October 1929. Key factors in determining the premium for dry fuel were variation in wages, inflation, stock market returns, and bond yields. This paper supports the uncertainty hypothesis as an explanation for the precipitous fall in consumption expenditures following the Great Crash of 1929.

JEL-codes: D15 N12 N72 Q23 Q41 (search for similar items in EconPapers)
Date: 2019-06
New Economics Papers: this item is included in nep-ene and nep-his
Note: DAE EEE
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w25997.pdf (application/pdf)

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:nbr:nberwo:25997

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25997

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().