标题：Households' Consumption under the Habit Formation Hypothesis. Evidence from Italian Households using the Survey of Household Income and Wealth (SHIW)
期刊名称：Discussion Papers / Department of Economics, University of Essex
出版年度：2005
卷号：2005
出版社：University of Essex
摘要：This paper explores the mis-specification of preferences as a cause of the poor
empirical performance of the traditional Life Cycle/Permanent Income model in
explaining Italian households' consumption decisions. Consumption profiles
generated under strict life cycle models could be hardly reconciled with those
exhibited by Italian households. We estimate how household consumption evolves
over time by using an Euler equation approach, enriched both for the presence of
habit formation in households' preferences and uncertainty. We test its
performance by using a GMM estimation strategy. Our results prove that ignoring
habit persistence can lead to misleading results in interpreting the
determinants of consumption.
