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Utility functions, future consumption targets and subsistence thresholds

Author

Listed:
  • Brishti Guha

    (School of Economics, Singapore Management University)

  • Ashok S. Guha

    (Indian Statistical Institute, India)

Abstract

If the consumer’s 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

  • Brishti Guha & Ashok S. Guha, 2008. "Utility functions, future consumption targets and subsistence thresholds," Working Papers 16-2008, Singapore Management University, School of Economics.
    • Handle: RePEc:siu:wpaper:16-2008
    as

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    File URL: https://mercury.smu.edu.sg/rsrchpubupload/13990/Utilityfunctions.pdf
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    References listed on IDEAS

    as
    1. Christopher D. Carroll, 2004. "Theoretical Foundations of Buffer Stock Saving," Economics Working Paper Archive 517, The Johns Hopkins University,Department of Economics.
    2. 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.
    3. Steger, Thomas M., 2000. "Economic growth with subsistence consumption," Journal of Development Economics, Elsevier, vol. 62(2), pages 343-361, August.
    4. 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.
    5. Ben-David, Dan, 1998. "Convergence clubs and subsistence economies," Journal of Development Economics, Elsevier, vol. 55(1), pages 155-171, February.
    6. 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.
    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

    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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