The impact of measured income uncertainty on Spanish household consumption at the end of the Great Recession
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ISSN: 0340-8744
E-ISSN: 1573-6911
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Abstract
The aim of this paper is to study empirically the existence of precautionary saving in Spain at the end of the Great Recession using the micro data provided by the Spanish Survey of Household Finances. Using the panel component of these data, I construct a measure of income uncertainty for each household from the observed household real income and use it to test for the strength of precautionary saving. I find that an increase of 1% in the standard deviation of income reduces household consumption by 8.8% when using the logarithm of the household consumption as dependent variable; however, when using the ratio between consumption and average income as dependent variable, given the average normal income and consumption in the sample, consumption will decrease by 8.1%
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Lugilde, A. The impact of measured income uncertainty on Spanish household consumption at the end of the Great Recession. Empirica 51, 679–702 (2024). https://doi.org/10.1007/s10663-024-09619-x
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Open Access funding provided thanks to the CRUE-CSIC agreement with Springer Nature
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Atribución 4.0 Internacional
This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/
This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/