IDEAS home Printed from https://ideas.repec.org/a/gai/recdev/r2305.html
   My bibliography  Save this article

Impact of Positive and Negative Income Shocks on Household Consumption
[Анализ Влияния Положительных И Отрицательных Шоков Дохода На Потребление Домашних Хозяйств]

Author

Listed:
  • Anastasia D. Petaykina

    (Russian Presidential Academy of National Economy and Public Administration)

Abstract

The paper analyzes the impact of positive and negative income shocks on household consumption as part of checking the reasons for non-fulfillment of classical consumption theories. The analysis is carried out using data for the period from 2006 to 2019 for individual Russian households available in the RLMS HSE. The regression of changes in consumption in response to positive and negative changes in income is estimated with the inclusion of the existence of liquidity constraints. The various specifications of the model argue in favor of the existence of liquidity constraints as the reason for the non-fulfillment of the permanent income hypothesis. The article was written on the basis of the RANEPA state assignment research programme.

Suggested Citation

  • Anastasia D. Petaykina, 2023. "Impact of Positive and Negative Income Shocks on Household Consumption [Анализ Влияния Положительных И Отрицательных Шоков Дохода На Потребление Домашних Хозяйств]," Russian Economic Development, Gaidar Institute for Economic Policy, issue 1, pages 39-46, January.
    • Handle: RePEc:gai:recdev:r2305
    as

    Download full text from publisher

    File URL: http://www.iep.ru/files/RePEc/gai/recdev/r2305.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Marjorie A. Flavin, 1984. "Excess Sensitivity of Consumption to Current Income: Liquidity Constraints or Myopia?," NBER Working Papers 1341, National Bureau of Economic Research, Inc.
    2. Michener, Ron, 1984. "Permanent income in general equilibrium," Journal of Monetary Economics, Elsevier, vol. 13(3), pages 297-305, May.
    3. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anastasia D. Petaykina, 2023. "Прогнозирование Изменений Потребления Домашних Хозяйств С Использованием Нейронных Сетей," Russian Economic Development (in Russian), Gaidar Institute for Economic Policy, issue 7, pages 42-53, July.
    2. Anastasia D. Petaykina, 2023. "Predicting Changes in Household Consumption Using Neural Networks [Прогнозирование Изменений Потребления Домашних Хозяйств С Использованием Нейронных Сетей]," Russian Economic Development, Gaidar Institute for Economic Policy, issue 7, pages 42-53, July.
    3. Anastasia D. Petaykina, 2023. "Анализ Влияния Положительных И Отрицательных Шоков Дохода На Потребление Домашних Хозяйств," Russian Economic Development (in Russian), Gaidar Institute for Economic Policy, issue 1, pages 39-46, January.
    4. Luis A. Gil-Alana & Antonio Moreno & Seonghoon Cho, 2012. "The Deaton paradox in a long memory context with structural breaks," Applied Economics, Taylor & Francis Journals, vol. 44(25), pages 3309-3322, September.
    5. Baugh, Brian & Ben-David, Itzhak & Park, Hoonsuk, 2013. "Disentangling Financial Constraints, Precautionary Savings, and Myopia: Household Behavior Surrounding Federal Tax Returns," Working Paper Series 2013-20, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
    6. Warwick J McKibbin & Peter J Wilcoxen, 1997. "Macroeconomic Volatility In General Equilibrium," Departmental Working Papers 1998-07, The Australian National University, Arndt-Corden Department of Economics, revised Jun 1998.
    7. Abel, Andrew B., 1990. "Consumption and investment," Handbook of Monetary Economics, in: B. M. Friedman & F. H. Hahn (ed.), Handbook of Monetary Economics, edition 1, volume 2, chapter 14, pages 725-778, Elsevier.
    8. Madsen, Jakob B. & Mcaleer, Michael, 2000. "Direct Tests of the Permanent Income Hypothesis under Uncertainty, Inflationary Expectations and Liquidity Constraints," Journal of Macroeconomics, Elsevier, vol. 22(2), pages 229-252, April.
    9. Chul‐Woo Kwon & Peter F. Orazem & Daniel M. Otto, 2006. "Off‐farm labor supply responses to permanent and transitory farm income," Agricultural Economics, International Association of Agricultural Economists, vol. 34(1), pages 59-67, January.
    10. Bunting, David, 2009. "The saving decline: Macro-facts, micro-behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 282-295, May.
    11. Jonathan Gruber & Aaron Yelowitz, 1999. "Public Health Insurance and Private Savings," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1249-1274, December.
    12. Grossmann, Volker, 2008. "Risky human capital investment, income distribution, and macroeconomic dynamics," Journal of Macroeconomics, Elsevier, vol. 30(1), pages 19-42, March.
    13. Lang, Harald, 1987. "Herman Wold on Optimal Properties of Exponentially Weighted Forecasts," Working Paper Series 179, Research Institute of Industrial Economics.
    14. Brautzsch, Hans-Ulrich & Günther, Jutta & Loose, Brigitte & Ludwig, Udo & Nulsch, Nicole, 2015. "Can R&D subsidies counteract the economic crisis? – Macroeconomic effects in Germany," Research Policy, Elsevier, vol. 44(3), pages 623-633.
    15. Sadullah Çelik & Yasemin Özerkek, 2008. "Panel cointegration analysis of consumer confidence and personal consumption in the European Union," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 10(2), pages 161-168, February.
    16. repec:spo:wpecon:info:hdl:2441/f0uohitsgqh8dhk9814kl7606 is not listed on IDEAS
    17. Ricardo Barradas & Ines Tomas, 2023. "Household indebtedness in the European Union countries: Going beyond the mainstream interpretation," PSL Quarterly Review, Economia civile, vol. 76(304), pages 21-49.
    18. Breaban, Adriana & van de Kuilen, Gijs & Noussair, Charles, 2016. "Prudence, Personality, Cognitive Ability and Emotional State," Other publications TiSEM 9a01a5ab-e03d-49eb-9cd7-4, Tilburg University, School of Economics and Management.
    19. Alok Bhargava, 2006. "Modelling the Health of Filipino Children," World Scientific Book Chapters, in: Econometrics, Statistics And Computational Approaches In Food And Health Sciences, chapter 11, pages 153-168, World Scientific Publishing Co. Pte. Ltd..
    20. Iheonu O Chimere & Tochukwu Nwachukwu, 2020. "Macroeconomic determinants of household consumption in selected West African countries," Economics Bulletin, AccessEcon, vol. 40(2), pages 1596-1606.
    21. McDonald, Rebecca & Powdthavee, Nattavudh, 2018. "The Shadow Prices of Voluntary Caregiving: Using Panel Data of Well-Being to Estimate the Cost of Informal Care," IZA Discussion Papers 11545, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    household consumption; income shocks; liquidity constraints; myopia; RLMS;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gai:recdev:r2305. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Olga Beloborodova (email available below). General contact details of provider: https://edirc.repec.org/data/gaidaru.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.