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Reexamining loss aversion in aggregate consumption - Swedish and international evidence

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  • Johansson, Martin W

    (Department of Economics, Lund University)

Abstract

Recent empirical and theoretical studies have suggested that consumption growth reacts asymmetrically to positive and negative expected income growth. In this paper we investigate if this behavior is robust to a) assumptions on how the households form their expectations of future earnings and b) sampling frequency. After investigating the case for Swedish consumption using survey data and a panel of annual observations on 15 OECD countries we conclude that previous results can not easily be generalized

Suggested Citation

  • Johansson, Martin W, 2002. "Reexamining loss aversion in aggregate consumption - Swedish and international evidence," Working Papers 2002:2, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2002_002
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    More about this item

    Keywords

    Permanent income hypothesis; Propsect theory; Loss aversion; Survey data;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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