Arbeitspapier

Cross-country heterogeneity in intertemporal substitution

We collect 2,735 estimates of the elasticity of intertemporal substitution in consumption from 169 published studies that cover 104 countries during different time periods. The estimates vary substantially from country to country, even after controlling for 30 aspects of study design. Our results suggest that income and asset market participation are the most effective factors in explaining the heterogeneity: households in rich countries and countries with high stock market participation substitute a larger fraction of consumption intertemporally in response to changes in expected asset returns. Micro-level studies that focus on sub-samples of rich households or asset holders also find systematically larger values of the elasticity.

Language
Englisch

Bibliographic citation
Series: IES Working Paper ; No. 11/2013

Classification
Wirtschaft
Survey Methods; Sampling Methods
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
Macroeconomics: Consumption; Saving; Wealth
Subject
elasticity of intertemporal substitution
consumption
metaanalysis
Bayesian model averaging

Event
Geistige Schöpfung
(who)
Havránek, Tomáš
Horváth, Roman
Iršová, Zuzana
Rusnak, Marek
Event
Veröffentlichung
(who)
Charles University in Prague, Institute of Economic Studies (IES)
(where)
Prague
(when)
2013

Handle
Last update
20.09.2024, 8:23 AM CEST

Data provider

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Object type

  • Arbeitspapier

Associated

  • Havránek, Tomáš
  • Horváth, Roman
  • Iršová, Zuzana
  • Rusnak, Marek
  • Charles University in Prague, Institute of Economic Studies (IES)

Time of origin

  • 2013

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