TY  - JOUR
AU  - Attanasio,Orazio P.
AU  - Jappelli,Tullio
TI  - Intertemporal Choice and the Cross-Sectional Variance of Marginal Utility
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6560
PY  - 1998
Y2  - May 1998
UR  - http://www.nber.org/papers/w6560
L1  - http://www.nber.org/papers/w6560.pdf
N1  - Author contact info:
Orazio Attanasio
Department of Economics
University College London
Gower Street
London WC1E 6BT
UNITED KINGDOM
Tel: 44/20-76795880
Fax: 44/20-79162775
E-Mail: o.attanasio@ucl.ac.uk

Tullio Jappelli
Department of Economics
University of Naples Federico II
Via Cinzia 45
80126 Napoli, Italy
E-Mail: tullio.jappelli@unina.it
AB  - The theory of intertemporal choice predicts that the cross-sectional variance of the marginal utility of consumption is equal to its own lag plus a constant and a random component. Using general preference specifications and some assumptions about the nature of the random component, we provide an explicit test of this hypothesis.  Our approach circumvents the necessity to identify a pure age profile of the cross-sectional variance of consumption and yields a well-specified statistical test.  This test is applied to data from the United States, the United Kingdom and Italy.  The results are remarkably consistent with the restrictions implied by the theory of intertemporal consumption choices.
ER  -