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 language | English |
|---|---|
| Pages (from-to) | 967-974 |
| Number of pages | 8 |
| Journal | Economics Bulletin |
| Volume | 30 |
| Issue number | 2 |
| Publication status | Published - 2010 Jun 18 |
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)