We attempt to disentangle income and wealth effects on consumption by disaggregating both the different types of income and wealth. We estimate a consumption function for a panel of quarterly data for 14 advanced economies spanning 1998 to 2012, using an error correction specification. We find a...

Testing for the money illusion hypothesis in aggregate consumption function generally involves a regression model that projects real consumption onto nominal disposable income and a consumer price index. Price data are usually available at a monthly level, but consumption and income data are...

We attempt to disentangle income and wealth effects on consumption by disaggregating both the different types of income and wealth. We estimate a consumption function for a panel of quarterly data for 14 advanced economies spanning 1998 to 2012, using an error correction specification. We find a...

The coefficients of a model estimated with a linear regression fail to represent a causal relation when this model is part of an accounting (semi) identity, because the coefficient is constrained to fulfill this identity. The aggregate consumption function suffers from this problem and its...

This paper examines the extent to which gains-from-trade predictions from commonly-used trade theories are consistent with observed household consumption decisions. Our approach is based on inference from household-level estimation of food Engel curves in the US and in a few other countries. For...

This paper examines the extent to which gains-from-trade predictions from commonly-used trade theories are consistent with observed household consumption decisions. Our approach is based on inference from household-level estimation of food Engel curves in the US and in a few other countries. For...

Investment disparity in the education of persons with disabilities may be larger on the part of parents, in part resulting from predicted lower returns to the investment due to mistaken beliefs about their capabilities, or actual lower returns due to barriers in the labor market. Using a...

Economists routinely make functional form assumptions about consumer demand to obtain welfare estimates. How sensitive are welfare estimates to these assumptions? We answer this question by providing bounds on welfare that hold for families of demand curves commonly considered in different...