The Linearity Property in the Consumption Function: Estimation, Tests and Some Related Results

Tsao, Che S.

doi:10.2307/1924003

Cited by 5 publications

(1 citation statement)

References 6 publications

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“…In the study, MPC was recorded higher than unity in three countries only. Tsao (1975) stimulated the linear property of consumption function by applying Maximum Likelihood Method (MLM). After testing the data, he found that consumer"s spending decision depends on the relative magnitude of his/her real income and real wealth.…”

Section: Review Of Literaturementioning

confidence: 99%

Estimation of Aggregate Consumption Function for Nepal: ARDL Bound Testing Approach

Chaudhary¹

2017

NRB Econ. Rev.

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The relationship between aggregate consumption and its determinants is one of the oldest statistical regularities of macroeconomics. It is important for macroeconomists, policy makers and for others as well. This study aims to estimate aggregate consumption function for Nepal employing Autoregressive Distributed Lag Model (ARDL) for the period of 1975 to 2015 using real income, real exchange rate, real interest rate and inflation rate as determinants. ARDL based co-integration analysis finds the existence of long run association among the variables. Furthermore, elasticity coefficient of real income is found significantly positive but the coefficients of other variables are negative. There exists inverse relationship between real depreciation of domestic currency and real consumption in the long run, but short run shows positive relation between them. The long run as well as short run dynamics of the model are significantly stable. Hence, income is a robust determinant of aggregate consumption. Real interest rate seems to generate substitution effects on consumption, and inflation rate evokes real balance effect on the aggregate consumption of Nepal further.

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Section: Review Of Literaturementioning

confidence: 99%

Estimation of Aggregate Consumption Function for Nepal: ARDL Bound Testing Approach

Chaudhary¹

2017

NRB Econ. Rev.

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Forecasting economic time series that require a power transformation: Case of state tax receipts

Nazmi

Leuthold

1988

Journal of Forecasting

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In this study, time series analysis is applied to the problem of foreca\tin: state income tax receipts. The data series is of special interest since it exhibits a strong trend with a high multiplicative seasonal component. An appropriate model is identified by simultaneous estimation of the parameters of the power transformation and the ARMA model using the Schwarz (1978) Bayesian information criterion. The forecastins performance of the time series model obtained from this procedure i\ compared with alternative time series and regression models. The study illustrates how an information criterion can be employed for identifying time series models that require a power transformation, as exemplified by state tax receipts. It also establishes time series analysis as a viable technique for forecasting state tax receipts. KEY WORDS Seasonal models Power transformation Bayesian information criterionThe growing consequence of state income tax revenues makes their accurate forecasting important. The techniques currently used include both single equation econometric models such as those of Singer (1968), Barnard and Dent (1979), and Greytak and Thursby (1980), and simultaneous equation models such as the one developed by Auten and Robb (1976). The data may be either quarterly or annual a n d explanatory variables often include income, population, per capita income, and the tax rate. The purpose of this paper is t o demonstrate the application of another forecasting technique, time series analysis, t o the problem of forecasting state tax revenues.The data used in this study are for the state of Illinois but the techniques are readily applicable to those of other states. The data are quarterly Illinois income tax receipts for the period 1970 111 through 1982 IV measured in real dollars (see the Data Appendix). As seen in Exhibit 1, the data display a pattern very similar t o the 'Sales of Company X' investigated by Chatfield and Prothero (1973) in the sense that they show a high multiplicative seasonal component and a strong trend. The model constructed from the 1970 111 t o 1980 IV data is used

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Hypothesis testing in models using the box-cox transformation

Spitzep

1982

Journal of Statistical Computation and Simulation

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The Linearity Property in the Consumption Function: Estimation, Tests and Some Related Results

Cited by 5 publications

References 6 publications

Estimation of Aggregate Consumption Function for Nepal: ARDL Bound Testing Approach

Estimation of Aggregate Consumption Function for Nepal: ARDL Bound Testing Approach

Forecasting economic time series that require a power transformation: Case of state tax receipts

Hypothesis testing in models using the box-cox transformation

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