Andreas Typhonides
(University of Cyprus)
will give a presentation on
The Cross Section of Household Preferences and the Marginal Propensity to Consume: Evidence from high frequency data.
Abstract: By leveraging high-frequency retail consumption data from the US, we non-parametrically (set) identify the distribution of household preferences. Our estimates are robust to the presence of household liquidity constraints of arbitrary form, and hence we can accommodate samples that include the 2007-2009 financial crisis. We furthermore investigate the effect of preferences on the marginal propensity to consume (MPC), a key statistic for the transmission of macroeconomic policy interventions. Heterogeneous preferences can explain some of the latent heterogeneity in the MPC, after controlling for liquidity constraints and other household characteristics. We also find supportive but mixed evidence on the role of preferences in determining the average hand-to-mouth status over the sample.