article · 2015

Adaptive Consumption Behavior✩

Peter Howitta

Cited by 0Abstract and details only

Abstract

In this paper we propose and study a theory of adaptive consumption behavior under income uncertainty and liquidity constraints. We assume that consumption is governed by a linear function of wealth, whose coefficients are revised each period by a procedure that places few informational or computational demands on the consumer. We show that under a variety of settings the procedure converges quickly to a set of coefficients with low welfare cost relative to a fully optimal nonlinear consumption function.

Cite this paper

APA 7

Howitta, P. (2015). Adaptive Consumption Behavior✩.

MLA 9

Howitta, Peter. “Adaptive Consumption Behavior✩.” 2015.

Chicago

Howitta, Peter. 2015. “Adaptive Consumption Behavior✩.”

Harvard

Howitta, P. (2015) ‘Adaptive Consumption Behavior✩’.

BibTeX

@article{howitta2015adaptive,
  title = {{Adaptive Consumption Behavior✩}},
  author = {Howitta, Peter},
  year = {2015}
}

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