Habit Formation and U.S. Household Consumption: A Semiparametric Panel Data Analysis

摘要

Using household panel data from the PSID, a semiparametric panel data model is estimated and examined for the presence of habit formation. Previous studies in this area were based on linear models, and the semiparametric model is an improvement over the latter in that it does not specify a particular functional form on the data generating process. Estimates of the model show evidence of habit formation for a substantial percentage of the observations. An examination of households by their demographic characteristics as well as by job status yields additional information and supporting evidence on the existence of habit formation.