An Appraisal Of The Wealth Effect In The US: Evidence From Pseudo-panel Data
How does household wealth influence consumption? The empirical evidence brought so far by the literature is unclear, mostly because of the low quality of the data more readily available: aggregate data, cross sections and panel datasets lacking important variables all present major shortcomings for a proper analysis of the wealth effect. The aim of the paper is to contribute to the appraisal of the wealth effect performing a pseudo-panel analysis for the USA (1989-2007), combining information from the Consumer Expenditure Survey and the Survey of Consumer Finances. The authors distinguish between total and non durables consumption, and they6 also investigate the roles of the different components of household wealth, both gross and net.