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Adjustment of Consumers' Durables Stocks: Evidence from Automobile Purchases
This paper tests an optimal (S, s) rule in household durable purchases and examines directly the resulting aggregate expenditure dynamics. The observed decision rule responds to income uncertainty and growth as predicted by an (S, s) model resulting from transactions costs. Tests against liquidity c...
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| Published in: | The Journal of political economy 1994-06, Vol.102 (3), p.403-436 |
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| Main Author: | |
| Format: | Article |
| Language: | English |
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| cited_by | cdi_FETCH-LOGICAL-c353t-1eb092457f8906c29ccbaba20df47a4f85c669bacb2b869dc80f985cc1f6de993 |
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| container_end_page | 436 |
| container_issue | 3 |
| container_start_page | 403 |
| container_title | The Journal of political economy |
| container_volume | 102 |
| creator | Eberly, Janice C. |
| description | This paper tests an optimal (S, s) rule in household durable purchases and examines directly the resulting aggregate expenditure dynamics. The observed decision rule responds to income uncertainty and growth as predicted by an (S, s) model resulting from transactions costs. Tests against liquidity constraints find that about half the households purchase according to an optimal (S, s) rule. Aggregating the (S, s) rule over households produces a cross-section distribution of durables holdings. The empirical distribution is similar to that predicted theoretically, as is its response to aggregate shocks. Furthermore, simulations of aggregate expenditure based on the household distribution exhibit dynamics consistent with those observed in the 1980s. |
| doi_str_mv | 10.1086/261940 |
| format | article |
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| ispartof | The Journal of political economy, 1994-06, Vol.102 (3), p.403-436 |
| issn | 0022-3808 1537-534X |
| language | eng |
| recordid | cdi_proquest_miscellaneous_60735240 |
| source | International Bibliography of the Social Sciences (IBSS); Business Source Ultimate; JSTOR Archival Journals and Primary Sources Collection; Worldwide Political Science Abstracts; EBSCO_EconLit with Full Text（美国经济学会全文数据库） |
| subjects | Aggregate expenditures Aggregate income Automobile sales Automobiles Consumer behavior Consumer behaviour Durable goods Economic models Economic Policy Economic theory Economics Ergodic theory Expenditure Expenditures Household expenditure Households Income estimates Liquidity Microeconomics Political economy Statistical analysis Studies Transaction costs Wealth |
| title | Adjustment of Consumers' Durables Stocks: Evidence from Automobile Purchases |
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