@techreport{NBERw0882,
 title = "The Effect of Liquidity Constraints on Consumption: A Cross-Sectional Analysis",
 author = "Fumio Hayashi",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "882",
 year = "1982",
 month = "April",
 URL = "http://www.nber.org/papers/w0882",
 abstract = {This paper examines the effect of liquidity constraints on consumption expenditures using a single-time cross-section data set. A reduced-form equation for consumption is estimated on high-saving households by the Tobit procedure to account for the selectivity bias. Since high-saving households are not likely to be liquidity constrained, the estimated equation is an appropriate description of how desired consumption dictated by the life cycle-permanent income hypothesis is related to the variables available in the cross-section data. When the reduced-form equation is used to predict desired consumption, the gap between desired consumption and measured consumption is most evident for young households.},
}