{"title":"Consumption and the permanent income of households","authors":"Roni Frish","doi":"10.1016/j.rie.2024.101011","DOIUrl":null,"url":null,"abstract":"<div><div>This study examines household consumption using data from the Israeli Consumer Expenditure (CE) Surveys and longitudinal administrative income records for 2004–16. The key findings challenge the Permanent Income Hypothesis (PIH) and the Life-Cycle Hypothesis (LCH): The propensity to consume out of income received after the CE survey is half that of income received before the survey. Households with higher income growth showed higher consumption growth. Households tend to consume a significant portion of transitory income straightaway. Finally, households without a pension plan show a marked decrease in consumption upon crossing the retirement age.</div></div>","PeriodicalId":46094,"journal":{"name":"Research in Economics","volume":"78 4","pages":"Article 101011"},"PeriodicalIF":1.2000,"publicationDate":"2024-10-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Research in Economics","FirstCategoryId":"1085","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1090944324000759","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
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Abstract
This study examines household consumption using data from the Israeli Consumer Expenditure (CE) Surveys and longitudinal administrative income records for 2004–16. The key findings challenge the Permanent Income Hypothesis (PIH) and the Life-Cycle Hypothesis (LCH): The propensity to consume out of income received after the CE survey is half that of income received before the survey. Households with higher income growth showed higher consumption growth. Households tend to consume a significant portion of transitory income straightaway. Finally, households without a pension plan show a marked decrease in consumption upon crossing the retirement age.
期刊介绍：
Established in 1947, Research in Economics is one of the oldest general-interest economics journals in the world and the main one among those based in Italy. The purpose of the journal is to select original theoretical and empirical articles that will have high impact on the debate in the social sciences; since 1947, it has published important research contributions on a wide range of topics. A summary of our editorial policy is this: the editors make a preliminary assessment of whether the results of a paper, if correct, are worth publishing. If so one of the associate editors reviews the paper: from the reviewer we expect to learn if the paper is understandable and coherent and - within reasonable bounds - the results are correct. We believe that long lags in publication and multiple demands for revision simply slow scientific progress. Our goal is to provide you a definitive answer within one month of submission. We give the editors one week to judge the overall contribution and if acceptable send your paper to an associate editor. We expect the associate editor to provide a more detailed evaluation within three weeks so that the editors can make a final decision before the month expires. In the (rare) case of a revision we allow four months and in the case of conditional acceptance we allow two months to submit the final version. In both cases we expect a cover letter explaining how you met the requirements. For conditional acceptance the editors will verify that the requirements were met. In the case of revision the original associate editor will do so. If the revision cannot be at least conditionally accepted it is rejected: there is no second revision.
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