Data quality in the Penn World Tables varies systematically across countries that have different growth rates and at different stages of economic development, thus introducing measurement error correlated with variables of economic interest. We explore the seriousness of this problem with three...

Friedman's Permanent Income Hypothesis (PIH) predicts that the income elasticity of consumption should be higher for households for which a large fraction of the variation of their income is permanent than for households facing more transitory variations in income. We test this prediction using...