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DESCRIPTION:Corina Boar (New York University)\n	Host: Rui Castro\n\nDate: Fe
 bruary 21\, 2020\n	Location: Leacock 429\n\nWebsite: https://sites.google.c
 om/site/corinaboar\n\n'Who Are the Hand-to-Mouth?'\n\nAbstract:\n	Many hous
 eholds hold little wealth\, especially liquid wealth. In precautionary sav
 ings models\, absent preference heterogeneity\, these households should di
 splay not only higher marginal propensities to consume (MPC’s)\, but also 
 lower average propensities to consume (APC’s) and higher future consumptio
 n growth. We see from the PSID that such “hand-to-mouth” households actual
 ly display higher APCs and no faster spending growth. They also adjust spe
 nding to a greater extent through the number of categories consumed. Consi
 stent with a role for preference heterogeneity\, the panel data show that 
 it is the propensity to be hand-to-mouth\, not current assets\, that predi
 cts high APC\, low consumption growth\, and other spending differences for
  the hand-to-mouth. To identify the extent of preference heterogeneity\, w
 e consider the model of Kaplan and Violante (2014) with both liquid and il
 liquid assets\, but allow heterogeneity in preferences. To match the data\
 , the vast majority of poor hand-to-mouth must be impatient and have a hig
 h intertemporal elasticity of substitution (IES). The richer\, but illiqui
 d\, hand-to-mouth are disproportionately high IES\, though not impatient. 
 Thus a high IES is a key determinant of assets for households typically vi
 ewed as hand-to-mouth. The model additionally shows that preferences play 
 a prominent role in differences in MPC’s across consumers.\n
DTSTART:20200221T203000Z
DTEND:20200221T220000Z
LOCATION:Leacock 429\, Leacock Building\, CA\, QC\, Montreal\, H3A 2T7\, 85
 5 rue Sherbrooke Ouest
SUMMARY:Corina Boar (New York University)\, 'Who Are the Hand-to-Mouth?'
URL:/economics/channels/event/corina-boar-new-york-uni
 versity-who-are-hand-mouth-301814
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