Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Smock says cohabitation does not reduce odds of marriage

Smock cited in story on how low marriage rates may exacerbate marriage-status economic inequality

Frey says low turnover in House members related to lack of voter turnout among moderates

Highlights

Susan Murphy named Distinguished University Professor

Sarah Burgard and former PSC trainee Jennifer Ailshire win ASA award for paper

James Jackson to be appointed to NSF's National Science Board

ISR's program in Society, Population, and Environment (SPE) focuses on social change and social issues worldwide.

Next Brown Bag


PSC Brown Bags will return in the fall

Melvin Stephens, Jr photo

Paycheque receipt and the timing of consumption

Publication Abstract

Stephens, Jr., Melvin. 2006. "Paycheque receipt and the timing of consumption." Economic Journal, 116(513): 680-701.

This article examines the consumption response to monthly paycheque receipt. Since the amount and arrival date of paycheques are known in advance, the receipt of a paycheque does not coincide with the receipt of new information. Under the basic rational expectations Life-Cycle/Permanent Income Hypothesis, household consumption should not respond to paycheque arrival. Using data from the UK's Family Expenditure Survey, this article finds that household consumption is excessively sensitive to paycheque receipt. The results cannot be explained by any underlying monthly expenditure fluctuations common to all households. The presence of liquidity constraints as measured by wealth and age can account for the excess sensitivity results.

DOI:10.1111/j.1468-0297.2006.01106.x (Full Text)

Licensed Access Link

Browse | Search : All Pubs | Next