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dc.contributor.authorNi, Shawn, 1962-eng
dc.contributor.authorSeol, Youn, 1973-eng
dc.date.issued2007eng
dc.description.abstractThe monthly salaries and allowances of Korean government employees are known in advance but vary greatly throughout the year. Using a large Korean monthly panel data set from 1994 to 2003, we examine how nondurable consumption expenditure in households headed by government employees responds to predictable income changes. We find excess sensitivity in consumption during the pre-Asian financial crisis era in households headed by young government employees with low liquid assets or low income. These household features are commonly associated with liquidity constraints. Further analysis shows that despite the apparent association, liquidity constraint is not the most convincing explanation for the excess sensitivity. Instead, the empirical finding is consistent with the theory that certain households deviate from consumption smoothing when the effort involved exceeds the welfare gained.eng
dc.identifier.citationDepartment of Economics, 2007eng
dc.identifier.urihttp://hdl.handle.net/10355/2562eng
dc.publisherDepartment of Economicseng
dc.relation.ispartofEconomics publicationseng
dc.relation.ispartofcommunityUniversity of Missouri-Columbia. College of Arts and Sciences. Department of Economicseng
dc.relation.ispartofseriesWorking papers (Department of Economics);WP 07-14eng
dc.source.urihttp://econ.missouri.edu/working-papers/2007/wp0714_ni.pdfeng
dc.subjectexcess sensitivityeng
dc.subject.lcshCost and standard of livingeng
dc.subject.lcshConsumption (Economics) -- Mathematical modelseng
dc.titleExcess Sensitivity in Consumption without Liquidity Constraint: Evidence from Monthly Household Panel Dataeng
dc.typeWorking Papereng


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