CEU Electronic Theses and Dissertations, 2008
| Author | Sándor, László |
|---|---|
| Title | Procrastination and Life-Cycle Savings: Some Micro-Evidence for Hyperbolical Discounting |
| Summary | This thesis revisits the basis of recent research on the empirical regularities of time-preferences and life-cycle saving behavior. For this, marginal propensities to consume out of anticipated income changes are estimated on a large panel dataset, the Panel Study of Income Dynamics, containing detailed data on American households. The reported estimates, using the latest available methods in instrumental-variables estimation, are compared with the single reported number of 23% from which estimates of savings-related short-term and long-term discount rates have been calculated recently. Some weaknesses of the common specification in the literature are exhibited, and more reassuring estimates are offered in the range of 30%-70%. The main contribution of this thesis is that it reexamines some proposed innovations of behavioral economics on micro-level field data, with longer time-series and wider domain than done before. It shows that the key moment varies considerably between time-periods and groups, and thus methods neglecting the richness of micro data are seriously compromised. However, it finds, in line with earlier literature on the comovement of income and consumption, that the permanent income hypothesis is not a full description of household savings behavior. Hyperbolical discounting remains a plausible explanation for the deviations, yet convincing corroborating evidence from field micro data is still disturbingly scarce. JEL classification: D91 (Intertemporal Consumer Choice; Life Cycle Models and Saving) |
| Supervisor | Kézdi, Gábor |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2008/sandor_laszlo.pdf |
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