NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Consumer Expenditure Function

Michael R. Darby

NBER Working Paper No. 79
Issued in March 1975

A consumer expenditure function which integrates pure consumption and household investment in durable goods is formulated and estimated. Because of reduced reliance on the official classification of commodities as durable or nondurable, a considerable increase in ability to explain consumer expenditures results as compared to multiequation models. Further empirical investigation provides strong evidence that: (1) private sector income is significantly better than disposable personal income for explaining consumer expenditures, (2) the M1 definition of money is similarly superior to both M2 and M3 definitions, and (3) the weight of current income in permanent income is about 10% per annum. Data appendix included.

download in pdf format
   (910 K)

email paper

This paper is available as PDF (910 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w0079

Published:

Users who downloaded this paper also downloaded these:
Darby The Consumer Expenditure Function
Long and Malitz w1145 Investment Patterns and Financial Leverage
Friedman Introduction to "A Theory of the Consumption Function"
DeLong, Shleifer, Summers, and Waldmann w2715 The Survival of Noise Traders in Financial Markets
Carroll w8387 A Theory of the Consumption Function, With and Without Liquidity Constraints (Expanded Version)
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us