Did Household Consumption Become More Volatile? [Accepted for publication by AER]

Content Provider	Semantic Scholar
Author	Gorbachev, Olga
Copyright Year	2010
Abstract	I show that after accounting for predictable variation arising from movements in real interest rates, preferences and income shocks, liquidity constraints and measurement errors, volatility of household consumption in the US increased by 23.5 percent between 1970 and 2004. The increase was lower than that of volatility of family income. However, nonwhite households and household with less than 13 years of education, for whom there was no differential increase in income volatility, experienced significantly larger increase in volatility of household consumption. The effect of race and education remained significant even after income, working history, marital status, family size and composition were controlled for. Substantial differences in wealth and access to credit markets point to the main reason for this divide.
File Format	PDF HTM / HTML
Alternate Webpage(s)	https://www.research.ed.ac.uk/portal/files/8212114/GORBACHEV_2010_Did_household_consumption_become_more_volatile.pdf
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article