Imperfect insurance and differing propensities to consume across households

• 成果类型: Article
• 署名作者: McCarthy, J
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/0304-3932(95)01214-1
• 发表日期: 1995
• 页码: 301-327
• 关键词: precautionary savings; liquidity constraints; marginal propensity to consume

摘要

This paper extends previous tests of consumption insurance by splitting the sample to examine whether the marginal propensity to consume (MPC) out of idiosyncratic income shocks is larger for low-wealth households than it is for high-wealth households. Using data from the PSID, I find: (1) The MPC of low-wealth households is higher than that of high-wealth households. There are indications that both precautionary savings behavior and liquidity constraints contribute to this difference. (2) Splitting the data using two different measures of wealth indicates that households perceive housing equity as illiquid. (3) When low-wealth households are split into two subgroups, the MPC of the very-low-wealth group is smaller, reflecting the insurance aspects of means-tested safety-net programs.