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| Author | : Gilbert R. Ghez |
| Publisher | : |
| Total Pages | : 172 |
| Release | : 1975 |
| Genre | : Consumers |
| ISBN | : 9780598172938 |
| Author | : Gilbert R. Ghez |
| Publisher | : Columbia University Press |
| Total Pages | : 188 |
| Release | : 1975 |
| Genre | : Business & Economics |
| ISBN | : |
There is a belief now that family behavior over the life cycle can be analyzed by economic methods. This study deals with allocation of resources by families over time.
| Author | : Jeremy Greenwood |
| Publisher | : |
| Total Pages | : 52 |
| Release | : 1990 |
| Genre | : Households |
| ISBN | : |
| Author | : Orazio P. Attanasio |
| Publisher | : |
| Total Pages | : 54 |
| Release | : 1993 |
| Genre | : Consumption (Economics) |
| ISBN | : |
The main aim of this paper is to assess the validity of the life cycle model of consumption. In particular, we address an issue that has recently received much attention, especially in the macroeconomic literature: that of "excess sensitivity" of consumption growth to income growth. We do this using a time series of cross sections and a novel and flexible parameterization of preferences. The former allows us to' address aggregation issues directly, while with the latter we can allow both the discount factor and the elasticity of intertemporal substitution eis to be affected by various observable variables and lifetime wealth. The main findings can be summarized as follows: (i) the excess sensitivity of consumption growth to labor income disappears when we control for demographic variables. This is true both at life cycle and business cycle frequencies. (ii) estimation of a flexible specification of preferences indicates that the elasticity of intertemporal substitution is a function of several variables, including the level of consumption. The eis increases with the level of consumption, as expected. (iii) the variables that change the eis are also important in explaining why we observe excess sensitivity over the business cycle. (iv) we are able to reconcile our results with those reported both in the macro and micro literature. (v) in our specification the elasticity of intertemporal substitution is not very well determined. This result, however, should be taken with care, as we have not made an effort to construct a 'preferred' specification, which would probably include additional controls for labor supply behavior. The evidence presented shows that the life cycle model cannot be easily dismissed. Indeed, we believe that the model does a good job at representing consumption behavior both over the life cycle and over the business cycle.
| Author | : Daniel Shaviro |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2023 |
| Genre | : |
| ISBN | : |
What time periods should we use in tax and other fiscal policy to evaluate people's circumstances, and thus to determine either how they are being treated, or how they ought to be? This question is both fundamental and pervasive.Standard economic reasoning offers grounds for entirely basing one's thinking on lifetime models. In particular, the closely related permanent income and life cycle hypotheses support employing a purely lifetime perspective in evaluating people's circumstances and treatment. The resulting model posits that people make decisions on a lifetime basis, seeking to optimize lifetime utility in the face of both (1) period-specific declining marginal utility of consumption, and (2) whatever preferences they happen to have as between consumption in different periods. Accordingly, in the presence of complete markets (including a lack of borrowing constraints), the question of when one earns a given dollar ostensibly makes no difference regarding when one spends it on consumption. And equivalently, when one pays a given dollar of tax will make no difference regarding how much one spends in any period.This model applies the same basic logic as a two-goods model in an Economics 101 casebook (featuring, say, pizza and movies), but in a far more complex setting in which its application is considerably more challenging. Despite its ruthless simplification, it likely has some degree of descriptive accuracy. People surely do make some plans across very long time horizons, such as early-life career choice, and subsequent planning (however imperfect it may be) for retirement.Yet the factors that undermine life cycle view's accuracy and normative relevance are not limited to borrowing constraints. Also of crucial importance are people's tendency to treat different periods as effectively separate, and a number of other constraints that would prevent them (even if so minded) from equalizing the marginal utility of consumption as between periods.In sum, therefore, the life cycle model is not sufficiently descriptively accurate to be treated as more than an important orienting benchmark. Like such other “it doesn't matter” theories as the Coase Theorem, the Efficient Markets Hypothesis, and the Modigliani-Miller Theorem, its value lies more in its showing us where to look for falsifying conditions, than in its actual empirical validity.
| Author | : Michael Dotsey |
| Publisher | : |
| Total Pages | : 46 |
| Release | : 2010 |
| Genre | : Consumption (Economics) |
| ISBN | : |
The authors incorporate home production in a dynamic general equilibrium model of consumption and saving with illiquid housing and a collateralized borrowing constraint. They show that the model is capable of explaining life-cycle patterns of households' time use and consumption of different categories. Specifically, households' market hours and home hours are fairly stable early in the life cycle. Market hours start to decline sharply at age 50, while home hours begin to increase at age 55. Households' consumption of the market good, home input, and housing services all exhibit hump shapes over the life cycle, with the market good having the most pronounced hump, followed by the home input, and then housing services. A plausibly parameterized version of the authors' model predicts that the interaction of the labor efficiency profile and the availability of home production technology explain households' time use over the life cycle. The resulting income profiles, the endogenous borrowing constraint and the presence of home production account for the initial hump in all three consumption goods. The consumption profiles in the second half of the life cycle are mostly driven by the complementarity of home hours, home input, and housing in home production.
| Author | : |
| Publisher | : |
| Total Pages | : 198 |
| Release | : 2010 |
| Genre | : Consumption (Economics) |
| ISBN | : |
Consumers' shopping behavior connects market goods expenditure with the out-of-market time allocation in their daily time use. This study is composed of three essays. In the first essay, data are collected from the American Time Use Survey and it is found that an indvidual's time devoted to shopping is positively determined by opportunity cost of time. Grocery shopping and other shopping, as two distinct types of shopping, react differently to a series of individual and household characteristics as well as by seasons. The corresponding marginal effects also differentiate between shopping time, leisure time, and home production time. In regards to gender difference, females dominate in amount of shopping time, and males and females respond differently on change of time due to change in economic status. The second essay examines the demand for market goods as an important factor in the process of household production. The researcher analyzes food and non-food expenditures of households in the United States using the 2002 and 2003 Current Population Survey Food Security Supplements. The results reveal the relationship between earned income and food purchased for home consumption, food purchased in restaurants, and non-food grocery goods purchases. It is found that expenditure for food to be consumed at home is related positively to income, while the share of total purchase devoted to home consumption is negatively related to income. Demographic variables and socioeconomic variables are found to play important roles in expenditure determination. In the third essay, a joint examination of shopping time and shopping expenditures is performed by merging the data from the researcher's time use study and expenditure study. The results of this paper show that shopping time and goods expenditure are related positively, so that the complementarities exist between grocery shopping time and grocery expenditure for American households.
| Author | : Jean Lim |
| Publisher | : |
| Total Pages | : 304 |
| Release | : 2009 |
| Genre | : |
| ISBN | : |
Economists have rejected the popular view that time use is primarily influenced by local customs and law, and instead argue that it is determined by optimal choices of economic agents and the market mechanism. However the analysis of time allocation has been focused on the labor-leisure choice problem which posits a worker who wants more leisure because of his preference for leisure over work. Thus going beyond the standard model, these essays add to the theory of the economics of time use. First I examine why married men earn more. I explore the possibility that differences in household work by marital status can explain the observed male marital wages advantage. Depending on the type and timing of household work, I segregate it into flexible and inflexible household work, using the American Time Use Survey. Empirical results provide strong support for the productivity difference between married and never married men. Household work has significant negative and differential effects on wages. The effects are not only driven by total time spent on household work, but also by types and timing of household work. The result shows that inflexible household work has a stronger negative effect on wages than flexible household work. Second I study how taxes affect time and goods allocation in home production. I claim that an increase in sales taxes encourages households to substitute away from the market goods input in favor of untaxed non-market time input. I explore the substitution response by relating household market purchases and time use. The theory part shows that the size of elasticity of substitution between market goods input and time input is crucial for understanding the government's optimal tax policy. Then I show that it is optimal to impose lower taxes on goods used in the production of commodities with a higher elasticity of substitution. In the empirical part, I estimate sizes of elasticities of substitution of goods for time with the combined survey of Mexican household consumption expenditures and time allocation for 2002. I find that the elasticity of substitution for 'Eating' is lowest. Finally wage compensation for climate is examined. Using the Merged Outgoing Rotation Group File from 2002 to 2007, I find that the North-South wage differential in construction and extraction occupations is much higher than in any other occupations. I claim that this is because weather affects wage determination. If individuals are to locate in both desirable and undesirable locations, undesirable locations must offer higher wages. Using the O*NET database, I obtain information on how often an occupation requires exposure to weather conditions. Estimation results of the wage equation show that wage compensation for living in bad weather amounts to 11.9 percent of hourly wages evaluated at sample means. The difference in wage compensation for working in bad weather between the most exposed (outdoorness index = 5) and least exposed (outdoorness index = 0) occupations is estimated to be 9.6 percent of hourly wages evaluated at sample means. In addition, I find that the occupational injury risk is related to weather conditions in the case of construction and extraction occupations.
| Author | : Gilbert R. Ghez |
| Publisher | : Columbia University Press |
| Total Pages | : 180 |
| Release | : 1975 |
| Genre | : Business & Economics |
| ISBN | : |
There is a belief now that family behavior over the life cycle can be analyzed by economic methods. This study deals with allocation of resources by families over time.
| Author | : Ray Rees |
| Publisher | : |
| Total Pages | : 34 |
| Release | : 2004 |
| Genre | : |
| ISBN | : |
