This paper uses detailed diary information from the British Family Expenditure Survey (FES) to investigate the expenditure patterns of school-age children. We estimate a Quadratic Almost Ideal Demand System, and find that, whilst most commodities are normal goods, sweets and toys are luxury...

A notion of "behavioral heterogeneity" of a finite population of households is modelled. It is shown that the higher the degree of behavioral heterogeneity the less sensitive depends the aggregate consumption expenditure ratio upon prices. As a consequence, behavioral heterogeneity implies a...

We solve Ireland's (1994) conspicuous consumption model (where social-status concerns are introduced into the utility function) for Cobb-Douglas (CD) utility. In the resulting generalized CD consumer model, Engel curves are no longer limited to linearity. In the homothetic CD case, total...

A theory in which the timing of consumer expectation adjustments is endogenously state-dependent and stochastic is proposed. These expectation adjustments generate highly heterogenous consumption responses to income windfalls: many households do not respond, those who do over-react, the marginal...

Our data indicate significantly steeper declines in nondurable expenditures in the UK compared to the US in spite of income paths at older ages exhibiting similar declines. We examine several possible causes, including different employment paths, housing ownership and expenses, levels and paths...

For a household, home ownership provides necessary shelter, potential investment returns associated with property appreciation and a hedge against increased housing related cash outlays. In addition to potential appreciation, individual households benefit over time from a housing dividend...

For a household, home ownership provides necessary shelter, potential investment returns associated with property appreciation and a hedge against increased housing related cash outlays. In addition to potential appreciation, individual households benefit over time from a housing dividend...

The prudence theory predicts that economic insecurity reduces all consumption expenditures. We question this prediction by estimating the effect of economic insecurity on various expenditure items using an Australian longitudinal data set (HILDA) and panel regressions. Our results confirm that...

This paper studies the infinite horizon optimal consumption with a path-dependent reference under the exponential utility. The performance is measured by the difference between the non-negative consumption rate and a fraction of the historical consumption maximum. The consumption running maximum...