Essays On Households Consumption And Saving Decisions
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Essays On Households Consumption And Saving Decisions
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Author : Serafin Frache Derregibus
language : en
Publisher:
Release Date : 2014
Essays On Households Consumption And Saving Decisions written by Serafin Frache Derregibus and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
Essays On Household Consumption
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Author : Matias Felix Barenstein
language : en
Publisher:
Release Date : 2004
Essays On Household Consumption written by Matias Felix Barenstein and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with categories.
Essays On Household Saving Rates
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Author : Yi Chen
language : en
Publisher:
Release Date : 2015
Essays On Household Saving Rates written by Yi Chen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
This dissertation is devoted to understanding household saving rates of the two largest countries in the world - China and the United States. The first two chapters explain why the Chinese elderly save at extraordinarily high rates and the third chapter explains why the U.S. personal saving rate has been falling since 1980's. Chapter 1 explores the potential explanation of the high saving rates of the Chinese elderly. The high saving rate of China has attracted global attention. Furthermore, the saving rates of the Chinese elderly are especially high. Understanding why the elderly in China save at high rates is important for two reasons: (1) it partially explains the high aggregate saving rate in China, and (2) the fact that the elderly save more than the middle-aged contradicts the predictions of the life-cycle model. In this chapter, I present evidence that pension income is the primary explanation for the high saving rates of elderly Chinese households. I provide this evidence in two steps. First, I document three stylized facts that are consistent with this hypothesis: (1) saving rates are higher in years with higher pensions, (2) saving rates are higher for those with more generous pension plans, and (3) policy reforms that exogenously increase pensions also increase saving rates. However, a higher pension income on its own cannot explain the entire pattern because a household can simultaneously adjust its consumption. Therefore, in the second step, I demonstrate that concerns regarding future medical expenditures and bequest motives can explain why households do not increase their consumption commensurate with increases in pension income. In Chapter 2, I build and estimate a dynamic life cycle model for two purposes. The first is to quantify the effect of pension income. The second purpose is to carry out counterfactual policy simulations. The model is a standard life-cycle model with three main components. First, pension income is properly modeled to capture the increase observed in the data. The second part of the model is about uncertainty. In the model, I cover income uncertainty, health status and medical expenditures as the main source of uncertainty for the elderly. Finally, individuals have bequest motives. I estimate the model using the method of simulated moments. The estimation results show that it is possible to match the data with reasonable parameters. It is noteworthy that the estimated degree of relative risk aversion for the Chinese elderly is similar to that of U.S. population in other studies. This implies when factors including pension income, medical expenditures and bequest motives are properly taken into account, it is not necessary to assume Chinese elderly to be highly risk averse to explain their high saving rates. With the model, I am able to carry out various policy simulations. The most interesting simulation is if the Chinese pension and economy growth rate becomes similar to those in the United States, the saving rates of the Chinese elderly will fall to the level of the U.S. Chapter 3 is a joint work with Maurizio Mazzocco and Bela Szemely. In this chapter we provide evidence that most of the decline in the U.S. personal saving rate from 9 percent in the early eighties to 2 percent in 2007 can be explained by the steep increase in health expenditure experienced by the U.S. economy during the same period. The most convincing evidence is provided using the FDA approval of new drugs as a source of exogenous variation in medical expenses. Employing this source of variation, we find that a $1$ percentage point increase in health expenditure generates a decline in the U.S. saving rate that is between $0.58$ and $0.67$ percentage points. Using this result, we calculate that the rise in health expenditure explains about 83 percent of the drop in the U.S. saving rate. To evaluate whether households changed their consumption decisions to mitigate the effect of higher medical expenses, we develop a stylized model of household's and government's decisions. Using the model jointly with our empirical results, we find that the households' response to the rise in health expenses was negligible. This is why the saving rate dropped by a significant amount. Finally, with the objective of better understanding why households did not respond, we provide evidence on how the increase in medical expenditure was funded. We find that it was paid almost exclusively by an increase in government debt, a reduction in other government expenses, and an increase in employer contributions to health funds. The main implication of these findings is that the households were barely affected by the rise in health expenditure. The households' negligible response was, therefore, rational.
Three Essays In The Microeconomics Of Savings And Consumption
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Author : Joshua Junshik Kim
language : en
Publisher:
Release Date : 2020
Three Essays In The Microeconomics Of Savings And Consumption written by Joshua Junshik Kim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
This dissertation, "Three Essays in the Microeconomics of Savings and Consumption", is comprised of three chapters which together, focus on how low-income communities and households living in the developing world make important savings and consumption decisions. The first chapter, titled "Currency Depreciations and Savings Behavior: Evidence from Household Deposits in Armenia", is co-authored with Diego Jimenez-Hernandez and Aleksandr Shirkhanyan. In this chapter, I study how households living in financially dollarized economies make currency and savings decisions following a significant currency depreciation. Those living in the developing world often face the problem of how to safely store their assets when the value of their local currency is unstable. This instability leads to several complicated decisions households must make, such as how much to save and which currencies to save in. These choices are especially important for households during periods of macroeconomic volatility such as currency depreciations. This chapter studies how households make such savings decisions following a large currency depreciation in Armenia. We exploit the unique structure of Armenian financial instruments, which generates quasi-random variation in which savers are nudged into paying attention to the depreciation. We then study how this random difference in initial attention affects the future savings choices that individuals make. Using a differences-in-differences design, we find that individuals who received a nudge to pay attention to the currency depreciation significantly reduced their total savings, held their savings for shorter periods of time, and chose to save their assets in USD. We find that these effects are strongest for individuals who predominantly saved their in the domestic currency and individuals who are less financially sophisticated. We also find that while some of the differences in savings decisions are temporary, others persist long after the original depreciation event. The second chapter, "Are High-Interest Loans Predatory? Theory and Evidence from Payday Lending", evaluates the welfare impacts of payday loans and payday lending regulation. It is often argued that consumer lending regulations can increase welfare, because high-interest loans cause "debt traps" where people borrow more than they expect or would like to in the long run. We test this using an experiment with a large payday lender. While the most inexperienced quartile of borrowers underestimate their likelihood of future borrowing, the more experienced three quartiles predict correctly on average. This finding contrasts sharply with priors we elicited from 103 payday lending and behavioral economics experts, who believed that the average borrower would be highly overoptimistic about getting out of debt. Borrowers are willing to pay a significant premium for an experimental incentive to avoid future borrowing, implying that they perceive themselves to be time-inconsistent. We combine these data with a novel sufficient statistic-based identification strategy to estimate a a structural model of time preferences and beliefs. Using our estimated parameters, we carry out a behavioral welfare evaluation of common payday lending regulations. In our model, payday loan bans unambiguously reduce welfare, and limits on repeat borrowing generate at best small welfare gains. The last chapter, "Food Labeling: Effects on Supply and Demand", studies front of package labeling regulations. Front-of-package labeling (FoPL) regulations are an increasingly popular policy used to combat obesity. FoPLs place warning stickers on food products which are deemed to be unhealthy. However, the welfare consequences of FoPL regulations are ambiguous; while firms may produce healthier foods to avoid receiving a label, they may also increase prices due to higher production costs and increased product differentiation. We study how FoPL regulations impact consumer surplus and nutritional intake in the context of Chile, which passed a nationwide regulation mandating FoPL stickers on all processed food products which surpass a threshold level of critical nutrients such as calories or sugar. Combining detailed scanner-level data from Walmart and field-collected data on products' nutritional content and consumers beliefs, we find a decrease in sugar and caloric intake by 9% and 7% respectively. We find that consumers shifted demand from labeled to unlabeled products, and this substitution is highest for products which consumers had miscalibrated nutritional beliefs about. On the supply side, we find firms bunch the nutritional composition of their products at the regulatory thresholds to avoid receiving a label. We develop and estimate a model of supply and demand for food and nutrients, and find that accounting for strategic responses from firms increases the effect of FoPL regulations on nutritional intake by 20 to 30 percent. Finally, we compare FoPL with sin taxes.
Three Essays On The Geography Of Household Consumption Decisions
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Author : Jose Maria Casado Garcia
language : en
Publisher:
Release Date : 2011
Three Essays On The Geography Of Household Consumption Decisions written by Jose Maria Casado Garcia and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with Academic theses categories.
Essays In Optimal Consumption And Portfolio Choice
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Author : Jialun Li
language : en
Publisher:
Release Date : 2012
Essays In Optimal Consumption And Portfolio Choice written by Jialun Li and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.
Essays In Public Finance And Household Lifecycle Behavior
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Author : Francesca Parodi
language : en
Publisher:
Release Date : 2019
Essays In Public Finance And Household Lifecycle Behavior written by Francesca Parodi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
This PhD thesis investigates the impact of direct and indirect taxation on households" consumption, saving and labor supply decisions over the life cycle. Chapter 1 focuses on indirect taxation. A dynamic model of households saving, durable and non-durable consumption decisions in a context of income uncertainty and borrowing constraints is set up. A novel feature of the model is the consistent integration of an intratemporal static demand analysis for different categories of non-durables - necessities and luxuries - with an intertemporal dynamic model for durables and savings. Simulated counterfactuals based on the estimated model show that revenue neutral reforms changing value added tax rates towards uniformity would be welfare improving, however, they would redistribute in favor of the wealthiest groups. Chapters 2 and 3 analyze direct and indirect taxation jointly. Chapter 2 extends the model in Chapter 1 by allowing for endogenous labor supply decisions, heterogeneous preferences and uncertainty in family dynamics. The model is estimated on micro-data and its rich structure is shown to be crucial in reproducing the empirical patterns of households" life cycle economic behavior. Marshallian elasticities are then simulated along several dimensions and show that the model accounts for mechanisms of interaction between households" economic behavior and the tax system that have not been considered together in previous studies. Chapter 3 applies the model of Chapter 2 to conduct a quantitative normative analysis. Under a utilitarian framework, it is found that durables should be subsidized in presence of pre-commitment and uncertainty and that the optimal combination of taxes on non-durables and labor income crucially depends on the degree of preference heterogeneity. Allowing for a generalized social welfare criterion with varying degrees of government inequality aversion, it is shown that the model can rationalize the tax systems observed in reality.
Essays On Household Consumption And Income Underreporting
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Author : Merike Kukk
language : en
Publisher:
Release Date : 2016
Essays On Household Consumption And Income Underreporting written by Merike Kukk and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with Consumption (Economics) categories.
Essays On Household Consumption And Income Underreporting
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Author : Merike Kuuk
language : en
Publisher:
Release Date : 2016
Essays On Household Consumption And Income Underreporting written by Merike Kuuk and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
Three Essays On Household Saving And Wealth
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Author : Kyeongwon Yoo
language : en
Publisher:
Release Date : 2003
Three Essays On Household Saving And Wealth written by Kyeongwon Yoo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with Households categories.