Replication data for: Durable Consumption and Asset Management with Transaction and Observation Costs
Principal Investigator(s): View help for Principal Investigator(s) Fernando Alvarez; Luigi Guiso; Francesco Lippi
Version: View help for Version V1
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Project Citation:
Alvarez, Fernando, Guiso, Luigi, and Lippi, Francesco. Replication data for: Durable Consumption and Asset Management with Transaction and Observation Costs. Nashville, TN: American Economic Association [publisher], 2012. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-06. https://doi.org/10.3886/E116105V1
Project Description
Summary:
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The empirical evidence on rational inattention lags the theoretical developments: micro evidence on one of the most immediate consequences of observation costs—the infrequent observation of state variables—is not available in standard datasets. We contribute to filling the gap using new household surveys. To match these data we modify existing models, shifting the focus from nondurable to durable consumption. The model features both observation and transaction costs and implies a mixture of time-dependent and state-dependent rules. Numerical simulations explain the frequencies of trading and observation of the median investor with small observation costs and larger transaction costs. (JEL D12, D14, E21, G11)
Scope of Project
JEL Classification:
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D12 Consumer Economics: Empirical Analysis
D14 Household Saving; Personal Finance
E21 Macroeconomics: Consumption; Saving; Wealth
G11 Portfolio Choice; Investment Decisions
D12 Consumer Economics: Empirical Analysis
D14 Household Saving; Personal Finance
E21 Macroeconomics: Consumption; Saving; Wealth
G11 Portfolio Choice; Investment Decisions
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