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Evaluation of permanent and transitory shocks role in consumption and income dynamics in the Russian Federation

Author

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  • Koval, Pavel

    (Gaidar Institute, Moscow, Russian Federation)

  • Polbin , Andrey

    (RANEPA, Gaidar Institute, Moscow, Russian Federation)

Abstract

In this paper we estimated the parameters of household consumption sensitivity to permanent and transitory income shocks, as well as the evolution of the shocks’ variance over time, using RLMS micro-data. Estimations were conducted for various types of income and consumption, as well as social groups. Large families, which are consist of more than five members, have a reduced sensitivity to permanent shock and an increased sensitivity to transitory one, comparing to small families. Households with a head over 60 show increased sensitivity to permanent income shocks. The reaction of urban population consumption is less for transitory shocks and greater for permanent one. Households with a high-educated head are less sensitive to permanent income shocks compared to those with a non-educated head.

Suggested Citation

  • Koval, Pavel & Polbin , Andrey, 2020. "Evaluation of permanent and transitory shocks role in consumption and income dynamics in the Russian Federation," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 57, pages 6-29.
    • Handle: RePEc:ris:apltrx:0385
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    More about this item

    Keywords

    permanent shocks; transitory shocks; volatility; consumption; income; RLMS.;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)

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