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Durable goods and consumer behavior with liquidity constraints
Kim, H. Youn1; Molina, José Alberto2; Wong, K. K.Gary3
2023-09-12
Source PublicationScandinavian Journal of Economics
ABS Journal Level3
ISSN0347-0520
Volume126Issue:1Pages:155-193
Abstract

This paper presents an integrated model of intratemporal demand and intertemporal consumption, with allowance for durable goods and liquidity constraints. Demand equations for non-durable and durable goods with the user cost of durable goods are jointly estimated with a consumption Euler equation incorporating liquidity constraints for Norwegian consumers from 1978 to 2018. Results show that demand analyses ignoring durable goods lead to a significant bias in the elasticities of non-durable goods. Norwegian consumers are found to be impatient, with low risk aversion. There is weak evidence for liquidity constraints in consumption. No strong evidence exists for intertemporal substitution in consumption, but a considerable effect of uncertainty is found in durable consumption.

KeywordEuler Equation Indirect Utility Function Intertemporal Substitution Risk Aversion User Cost Of Durable Goods
DOI10.1111/sjoe.12546
URLView the original
Indexed BySSCI
Language英語English
WOS Research AreaBusiness & Economics
WOS SubjectEconomics
WOS IDWOS:001113343900001
PublisherWILEY, 111 RIVER ST, HOBOKEN 07030-5774, NJ
Scopus ID2-s2.0-85178394247
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Citation statistics
Document TypeJournal article
CollectionDEPARTMENT OF ECONOMICS
Corresponding AuthorKim, H. Youn
Affiliation1.Western Kentucky University, Bowling Green, 42101, United States
2.University of Zaragoza, Zaragoza, 50005, Spain
3.University of Macau, Taipa, Macao
Recommended Citation
GB/T 7714
Kim, H. Youn,Molina, José Alberto,Wong, K. K.Gary. Durable goods and consumer behavior with liquidity constraints[J]. Scandinavian Journal of Economics, 2023, 126(1), 155-193.
APA Kim, H. Youn., Molina, José Alberto., & Wong, K. K.Gary (2023). Durable goods and consumer behavior with liquidity constraints. Scandinavian Journal of Economics, 126(1), 155-193.
MLA Kim, H. Youn,et al."Durable goods and consumer behavior with liquidity constraints".Scandinavian Journal of Economics 126.1(2023):155-193.
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