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Household investment behaviour: Empirical investigations of durable consumption, returns to human capital, and borrowing restrictions

Padula, Mario; (2002) Household investment behaviour: Empirical investigations of durable consumption, returns to human capital, and borrowing restrictions. Doctoral thesis (Ph.D), UCL (University College London). Green open access

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Abstract

The thesis focuses on durable consumption, educational choices and borrowing restrictions and is made of four chapters. The first chapter estimates the Euler equation when the utility of durable and non-durable consumption is non-separable. It uses microdata on nondurable and durable consumption from a US rotating panel, the Consumer Expenditure Survey (CEX). We concentrate on cars (new and used) and find an estimate of the intertemporal rate of substitution higher than in the case where durable goods are not conditioned on. The second chapter constructs a household level measure of the stock of cars using an American data-set, the Consumer Expenditure Survey (CEX), documents some stylized facts and estimate a model of infrequent adjustment. A definition of return to human capital that accounts for uncertainty is the object of the third chapter. Jobs differ also for the uncertainty of their associated earnings. If markets are incomplete, risk-averse individuals value less risky jobs. Using data form the Italian the Survey of Household Income and Wealth (SHIW), and the American Panel Study of Income Dynamics (PSID), we find an extra-return due to uncertainty, which is higher in Italy than in the US. The fourth chapter focuses on the interaction between the quality of judicial enforcement and borrowing restrictions at the households level. Using Italian data drawn from the Survey of Household Income and Wealth (SHIW), we test if the probability of being liquidity constrained and the amount of household debt are affected by the quality of judicial enforcement. The lower it is, the higher the probability of being liquidity constrained, the lower the amount of debt.

Type: Thesis (Doctoral)
Qualification: Ph.D
Title: Household investment behaviour: Empirical investigations of durable consumption, returns to human capital, and borrowing restrictions
Open access status: An open access version is available from UCL Discovery
Language: English
Additional information: Thesis digitised by ProQuest.
Keywords: Social sciences; Household expenditure
URI: https://discovery.ucl.ac.uk/id/eprint/10099591
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