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Humps and Bumps in Lifetime Consumption

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  • Attanasio, Orazio P, et al

Abstract

In this article, the authors argue that the life-cycle model that allows demographics to affect household preferences and relaxes the assumption of certainty equivalence can generate hump-shaped consumption profiles over age that are very similar to those observed in household-level data sources and, in particular, match the differences in shape across different education groups. Liquidity constraints or myopia are not required to explain the empirical features of observed life-cycle patterns. Coauthors are James Banks, Costas Meghir, and Guglielmo Weber.

Suggested Citation

  • Attanasio, Orazio P, et al, 1999. "Humps and Bumps in Lifetime Consumption," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 22-35, January.
    • Handle: RePEc:bes:jnlbes:v:17:y:1999:i:1:p:22-35
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