Smoothing consumption by smoothing income; hours-of-work responses to idiosyncratic agricultural shocks in rural India

Article Abstract:

A study was conducted on the extent to which Indian labor markets allowed households to shift labor from farm to off-farm employment and the extent to which such a shift explained the observed lack of correlation between consumption and idiosyncratic crop shocks. Household males were found to increase their market hours of work in response to unanticipated variations in crop profits. Crop income shocks had a negative effect on consumption which implied that the ability to protect consumption from crop income shocks reflects adjustments in hours of work.

Agriculture, Crop Production, Employment, All Other Miscellaneous Crop Farming, Crop Farms, General farms, primarily crop, Income per Household, India, Farms, Labor market, Households

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Consumption adjustment under time-varying income uncertainty

Article Abstract:

The impact of income uncertainty on consumption was studied focusing on time-series variation. Evidences of precautionary saving was found in that increases in income uncertainty are related to increases in aggregate rates of saving. It was found that anticipated income growth rates have less explanatory power for consumption growth rates after conditioning on income uncertainty. Results indicated the presence of forward-looking consumers who gradually adjust precautionary savings in response to changing income uncertainty.

Retained Earnings & Savings, Personal Income, Savings, Uncertainty

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Does consumption take a random walk? Some evidence from macroeconomic forecasting data

Article Abstract:

A study was conducted to examine economic forecasts of US consumption and the rejection of the theory of random walk as an explanatory variable. Bandspectrum regressions are applied for the study. Results show that low-frequency growth rate variations support the rejection. These cyclical variations which span over two years explain changes in nondurable and services spending.

Random walks (Mathematics), Random walk theory

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