Consumption over the Life Cycle: Evidence from the Czech Republic
|Author:||Mgr. Cahlíková Jana|
|Year:||2011 - summer|
|Leaders:|| PhDr. Jan Zápal Ph.D.
|Work type:|| Doctoral
|Awards and prizes:|
|Abstract:||The main goal of this thesis is to analyze life-cycle consumption using Czech
microeconomic data from the 2000-2008 Household Budget Survey (HBS). Inspired by
Gourinchas and Parker (2002), who analyzed life-cycle consumption on American data, we
construct the Czech average household life-cycle consumption and income profiles. It is
found that the Czech average consumption profile is increasing over the whole life-cycle
and there is no hump-shape in the profile, contrary to the American results. Consumption
tracks income early in life and a breakpoint in household behavior is identified at age 45.
Czech evidence on household consumption is interpreted in the context of the Certainty-
Equivalent Life-Cycle Hypothesis Model and in the context of the Gourinchas & Parker
(2002) Model of life-cycle consumption under income uncertainty, which brings a
significant value-added for interpretation of the Czech profiles. The household behavior is
interpreted by varying strengths of the precautionary (assuring against income uncertainty)
and retirement motives for savings over the life. It is found that the Czech household lifecycle
behavior can be interpreted in the similar way as the behavior of the US households.
|Downloadable:|| Rogorous Thesis Cahlikova