Saving behavior under the influence of income risk: An experimental study

Tomoki Kitamura, Yasuhiro Yonezawa, Munenori Nakasato

Research output: Contribution to journalArticle

Abstract

Individual subjects are experimentally tested for precautionary saving. We use a simplified experimental framework and decision supporting tool to show that subject's consumption is consistent with precautionary saving. We find that subjects overact in changing current income. However, those over-reactions cancel each other, and subject's consumption behavior is close to the optimal solutions on average.

Original languageEnglish
Pages (from-to)967-974
Number of pages8
JournalEconomics Bulletin
Volume30
Issue number2
Publication statusPublished - 2010 Jun 18

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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