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Scarred Consumption
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AI
DOI：10.1257/mac.20210387.png)
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Abstract
En 中文
We show that prior lifetime experiences can scar consumers. Consumers who have lived through times of unemployment exhibit persistent pessimism about their future financial situation and spend significantly less years later , controlling for income , employment , and other life -cycle consumption factors. Due to their experience -induced frugality , scarred consumers build up more wealth. We use a stochastic life -cycle model to show that financial constraints and traditional models of income and unemployment scarring fail to generate the negative relationship between past experiences and consumption. Instead, the relationship is consistent with experience -based learning. (JEL D12, D15, D91, E21, E24, G51)
Keywords:
PANEL-DATA
EARNINGS LOSSES
HABIT FORMATION
LIFE-CYCLE
DYNAMICS
EXPERIENCES
PRICES
POLICY
OVERCONFIDENCE
UNEMPLOYMENT
Journal
A
IF:
5.7
Papers:
1.4K
Citations:
4.4K
