TY  - JOUR
AU  - Hayashi,Fumio
TI  - The Permanent Income Hypothesis and Consumption Durability: Analysis Based on Japanese Panel Data
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1305
PY  - 1984
Y2  - March 1984
UR  - http://www.nber.org/papers/w1305
L1  - http://www.nber.org/papers/w1305.pdf
N1  - Author contact info:
Fumio Hayashi
Hitotsubashi University
Grad. School of International Corporate Strategy
2-1-2 Hitotsubashi, Chiyoda-ku
Tokyo 101-8439
JAPAN
Tel: 81-3-5841-5652
Fax: 1-801-469-0086
E-Mail: fumio.hayashi@gmail.com
AB  - The permanent income hypothesis is tested on a four-quarter panel of about two thousand Japanese households for ten commodity groups. Consumption is a distributed lag function of expenditures, and the utility function is additively separable in time. Durability is defined as the persistence of the distributed lag. The permanent income hypothesis implies that, for each commodity group, expected change in expenditures is correlated neither with past expenditure changes on other commodities nor with expected change indisposable income, if its own lags are controlled for. The main results are the following: (1) durability is substantial even for food and services, (2)the permanent income hypothesis applies to almost all (probably more than ninety percent) of the population, and (3) the habit persistence hypothesis is rejected in favor of the permanent income hypothesis.
ER  -