Abstract
This paper constructs and estimates a model of consumer preferences in which the intertemporal elasticity of substitution (IES) of consumption expenditure rises with the level of wealth. The purpose of this paper is to measure the effect that systematic variation in the IES of poor and rich consumers has on the IES of aggregate consumption expenditure. We find economically significant differences in the IES of poor and rich consumers in Indian panel data on the consumption of individual households. We also find economically significant differences in the IES measured in aggregate time series data for the U.S. and India.
| Original language | English |
|---|---|
| Pages (from-to) | 507-534 |
| Number of pages | 28 |
| Journal | Journal of Monetary Economics |
| Volume | 38 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 1996 Dec |
| Externally published | Yes |
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Keywords
- Consumption
- Necessary goods
- Subsistence levels
ASJC Scopus subject areas
- Economics and Econometrics
- Finance
Cite this
Wealth-varying intertemporal elasticities of substitution : Evidence from panel and aggregate data. / Atkeson, Andrew; Ogaki, Masao.
In: Journal of Monetary Economics, Vol. 38, No. 3, 12.1996, p. 507-534.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Wealth-varying intertemporal elasticities of substitution
T2 - Evidence from panel and aggregate data
AU - Atkeson, Andrew
AU - Ogaki, Masao
PY - 1996/12
Y1 - 1996/12
N2 - This paper constructs and estimates a model of consumer preferences in which the intertemporal elasticity of substitution (IES) of consumption expenditure rises with the level of wealth. The purpose of this paper is to measure the effect that systematic variation in the IES of poor and rich consumers has on the IES of aggregate consumption expenditure. We find economically significant differences in the IES of poor and rich consumers in Indian panel data on the consumption of individual households. We also find economically significant differences in the IES measured in aggregate time series data for the U.S. and India.
AB - This paper constructs and estimates a model of consumer preferences in which the intertemporal elasticity of substitution (IES) of consumption expenditure rises with the level of wealth. The purpose of this paper is to measure the effect that systematic variation in the IES of poor and rich consumers has on the IES of aggregate consumption expenditure. We find economically significant differences in the IES of poor and rich consumers in Indian panel data on the consumption of individual households. We also find economically significant differences in the IES measured in aggregate time series data for the U.S. and India.
KW - Consumption
KW - Necessary goods
KW - Subsistence levels
UR - http://www.scopus.com/inward/record.url?scp=0030497327&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0030497327&partnerID=8YFLogxK
U2 - 10.1016/S0304-3932(96)01290-1
DO - 10.1016/S0304-3932(96)01290-1
M3 - Article
VL - 38
SP - 507
EP - 534
JO - Journal of Monetary Economics
JF - Journal of Monetary Economics
SN - 0304-3932
IS - 3
ER -