All Rights Reserved
AccessEcon LLC 2006, 2008.
Powered by MinhViet JSC

 
Alfredo Omar Palafox-Roca and Francisco Venegas-Martínez
 
''Consumption Decisions in an Economy with Heterogeneous Preferences Defined by a Bivariate Distribution''
( 2013, Vol. 33 No.2 )
 
 
This paper considers an economy populated by heterogeneous individuals in two respects: both parameters representing the subjective discount and the risk aversion rates are supposed to have a joint distribution. That is, consumers differ in their level of anxiety for present consumption and their risk aversion rate. The utility index is of the negative exponential type. This research provides a closed-form optimal consumption path of the average infinite-lived agent. Finally, some comparative statics experiments are carried out.
 
 
Keywords: Heterogeneous preferences, consumption decisions
JEL: C6 - Mathematical Methods and Programming: General
D9 - Intertemporal Choice and Growth: General
 
Manuscript Received : May 30 2012 Manuscript Accepted : Apr 16 2013

  This abstract has been downloaded 1690 times                The Full PDF of this paper has been downloaded 166542 times