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Utility functions, future consumption targets and subsistence thresholds

Author

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  • Ashok Guha

    (SMU)

  • Brishti Guha

Abstract

If the consumers risk aversion behavior varies intertemporally and if the risk aversion coefficient on future consumption becomes very large, the consumer tends to aim at a fixed future consumption target. A by-product is a reinterpretation of subsistence theories of consumption.

Suggested Citation

  • Ashok Guha & Brishti Guha, 2008. "Utility functions, future consumption targets and subsistence thresholds," Microeconomics Working Papers 22431, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:microe:22431
    as

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    File URL: http://www.eaber.org/node/22431
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    References listed on IDEAS

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    1. Dalgaard, Carl-Johan & Strulik, Holger, 2007. "A Bioeconomic Foundation of the Malthusian Equilibrium: Body Size and Population Size in the Long-Run," Hannover Economic Papers (HEP) dp-373, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    2. Christopher D. Carroll, 2004. "Theoretical Foundations of Buffer Stock Saving," Economics Working Paper Archive 517, The Johns Hopkins University,Department of Economics.
    3. Ben-David, Dan, 1998. "Convergence clubs and subsistence economies," Journal of Development Economics, Elsevier, vol. 55(1), pages 155-171, February.
    4. Guha Brishti & Guha Ashok S, 2008. "Target Saving in an Overlapping Generations Model," The B.E. Journal of Macroeconomics, De Gruyter, vol. 8(1), pages 1-26, March.
    5. Steger, Thomas M., 2000. "Economic growth with subsistence consumption," Journal of Development Economics, Elsevier, vol. 62(2), pages 343-361, August.
    6. Samwick, Andrew A., 1998. "Tax Reform and Target Saving," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(3), pages 621-635, September.
    7. Dasgupta, Partha, 1997. "Nutritional status, the capacity for work, and poverty traps," Journal of Econometrics, Elsevier, vol. 77(1), pages 5-37, March.
    8. Edmundson, W C & Sukhatme, P V, 1990. "Food and Work: Poverty and Hunger?," Economic Development and Cultural Change, University of Chicago Press, vol. 38(2), pages 263-280, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Intertemporal Consumer Choice; theories of consumption; risk aversion coefficient;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D10 - Microeconomics - - Household Behavior - - - General
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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