This paper proposes an estimable asset pricing model that builds upon micro consumption andreference-dependent preference. Central to the model is an S-shaped consumption utility function that is convex below the reference point. The model quantitatively accounts for both low risk-free rates and...

This paper investigates consumption-behavior heterogeneity across consumption growth levels by analyzing microdata from a unique macro perspective. This innovative approach allows us to test the applicability of Kahneman and Tversky's (1979) S-shaped utility to consumption behaviors with a...