A Test of the Permanent Income Hypothesis on Czech Voucher Privatization

The aim of this paper is to test the permanent income hypothesis on Czech voucher privatization. This form of privatization moved state assets to households and represented an unexpected windfall gain for participants of the privatization scheme. Whether the windfall was consumed or saved is tested in the tradition of empirical evidence on the permanent income hypothesis. The analysis based on data from a sample survey suggests that only a small number of transferred assets were cashed in and spent on consumption. This result supports the concept of the permanent income hypothesis