How Certain Are Dutch Households About Future Income? An Empirical Analysis

Das, Marcel; Donkers, Bas

doi:10.1111/j.1475-4991.1999.tb00343.x

Cited by 43 publications

(33 citation statements)

References 14 publications

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“…Instead of the measure employed by Das and Donkers (1999), we only consider the information related to how (un)certain respondents are about income changes next year and 5 years ahead (see also Hochguertel 2003). The results are summarized in Table 2, column "model 2".…”

Section: Resultsmentioning

confidence: 99%

“…4. Uncertainty on expected income change: Based on Das and Donkers (1999) and Hochguertel (2003), we exploit seven questions related to uncertainty about future income. First, respondents are asked how probable it is that next year income increases by more than 15%.…”

Section: Description Of the Datasetmentioning

confidence: 99%

“…between 5 and 10%, a decrease of between 10 and 15% and a decrease of more than 15%. We follow the suggestion of Das and Donkers (1999) and constructed probabilities for the categories of income changes in the following way:…”

Section: Description Of the Datasetmentioning

confidence: 99%

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Saving and habit formation: evidence from Dutch panel data

Alessie

Teppa

2009

Empir Econ

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This paper focuses on the role of habit formation in individual preferences. In this study, the model of Alessie and Lusardi (Econ Lett 55:103-108, 1997) and its extension by Guariglia and Rossi (Oxf Econ Pap 54:1-19, 2002) are considered. Our empirical specifications are based on their closed-form solutions, where current saving is expressed as a function of lagged saving and other regressors. In our study, we use a longitudinal data set from the Netherlands that allows us to disentangle the role of habit formation from unobserved heterogeneity. Contrary to most other studies using survey data, we find evidence in favor of habit formation. However, the magnitude of the habit formation coefficient is rather small. Income uncertainty seems to affect saving behavior of Dutch households.

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Section: Resultsmentioning

confidence: 99%

Section: Description Of the Datasetmentioning

confidence: 99%

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Saving and habit formation: evidence from Dutch panel data

Alessie

Teppa

2009

Empir Econ

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“…They applied this methodology to income expectations in the Survey of Economic Expectations (SEE); see, for example, Dominitz and Manski (1997). Das and Donkers (1999) applied this method to income expectations of Dutch households, using the same data source as we do, but earlier waves.…”

Section: Measurement Of Expectationsmentioning

confidence: 99%

Intertemporal Consumption With Directly Measured Welfare Functions and Subjective Expectations

2007

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Euler equation estimation of intertemporal consumption models requires many, often unverifiable assumptions. These include assumptions on expectations and preferences. We aim at reducing some of these requirements by using direct subjective information on respondents' preferences and expectations. The results suggest that individually measured welfare functions and expectations have predictive power for the variation in consumption across households. Furthermore, estimates of the intertemporal elasticity of substitution based on the estimated welfare functions are plausible and of a similar order of magnitude as other estimates found in the literature. The model favored by the data only requires cross-section data for estimation.

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“…Such data now exist in the Dutch VSB-panel (Das and Donkers, 1997), the American Survey of Economic Expectations (Dominitz and Manski, 1997a), and the Italian Survey of Household Income and Wealth (Guiso et al, 1992).…”

Section: Insert Figure 2 Herementioning

confidence: 99%

Comparing Predictions and Outcomes: Theory and Application to Income Changes

Das

Dominitz²,

Soest

1999

Journal of the American Statistical Association

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Household surveys often elicit respondents' intentions or predictions of future outcomes. The survey questions may ask respondents to choose among a selection of (ordered) response categories. If panel data or repeated cross-sections are available, predictions may be compared with realized outcomes. The categorical nature of the predictions data, however, complicates this comparison. Generalizing previous findings on binary intentions data, we derive bounds on features of the empirical distribution of realized outcomes under the "best-case" hypothesis that respondents form rational expectations and that reported expectations are best predictions of future outcomes. These bounds are shown to depend on the assumed model of how respondents form their "best prediction" when forced to choose among (ordered) categories. An application to data on income change expectations and realizations illustrates how alternative response models may be used to test the best-case hypothesis.

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How Certain Are Dutch Households About Future Income? An Empirical Analysis

Cited by 43 publications

References 14 publications

Saving and habit formation: evidence from Dutch panel data

Saving and habit formation: evidence from Dutch panel data

Intertemporal Consumption With Directly Measured Welfare Functions and Subjective Expectations

Comparing Predictions and Outcomes: Theory and Application to Income Changes

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