Does income uncertainty affect Spanish household consumption?

  1. Alba Lugilde 1
  1. 1 GAME-IDEGA, Universidade de Santiago de Compostela
Revista:
Documentos de Traballo. Análise Económica

ISSN: 1138-0713

Año de publicación: 2018

Número: 68

Páginas: 3-30

Tipo: Documento de Trabajo

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Otras publicaciones en: Documentos de Traballo. Análise Económica

Resumen

The aim of this paper is to study empirically the existence of precautionary saving in Spain using the micro data provided by the Spanish Survey of Household Finances. Using the panel component of these data I construct a measure of income risk, and use it to test for the strength of precautionary saving. I find that an increase of 1% in the standard deviation of income reduces household consumption by 5-7% depending on the specified model

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