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Permanent Income (permanent + income)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	66%

Terms modified by Permanent Income

permanent income hypothesis

Selected Abstracts

Estimating the Intergenerational Correlation of Incomes: An Errors,in,Variables Framework

ECONOMICA, Issue 273 2002
Ramses H. Abul Naga
Because the permanent incomes of parents and children are typically unobservable, the permanent income of the parent family is taken to be a latent variable, but it is assumed that a model for its determinants is known to the researcher. I propose two related estimators for the intergenerational correlation: a 2SLS procedure and a more efficient MIMIC estimator. MIMIC also provides estimates of the variance parameters required to evaluate the bias of the OLS estimator. Using US data, I provide estimates for the intergenerational correlation ranging between 0.30 and 0.78. The bias of the OLS estimator is calculated to be in the order of 40%. [source]

The role of permanent income and family structure in the determination of child health in Canada

HEALTH ECONOMICS, Issue 4 2001
Lori J. Curtis
Abstract We use data from the Ontario Child Health Study (OCHS) to provide the first Canadian estimates of how the empirical association between child health and both low-income and family status (lone-mother versus two-parent) changes when we re-estimate the model with pooled data. Two waves of data provide a better indication of the family's long-run level of economic resources than does one wave. Our measures of health status include categorical indicators and the health utility score derived from the Health Utilities Index Mark 2 (HUI2) system. Consistent with findings from other countries, we find that most outcomes are more strongly related to low-average income (in 1982 and 1986) than to low-current income in either year. Unlike some previous research, we find the quantitative impact of low-income on child health to be modest to large. Lone-mother status is negatively associated with most outcomes, but the lone-mother coefficients did not change significantly when we switched from low-current income to low-average income. This implies that the lone-mother coefficient in single cross-sections is not just a proxy for low-permanent income. Copyright © 2001 John Wiley & Sons, Ltd. [source]

Do consumption expenditures depend on the household's relative position in the income distribution?

INTERNATIONAL JOURNAL OF CONSUMER STUDIES, Issue 1 2002
Mohamed Abdel-Ghany
Abstract Even though the permanent income and relative income hypotheses have been introduced in past research to explain consumer behaviour, no previous attempt was undertaken to integrate them in one model. In this article, the hypotheses were synthesized into a single model. The model was empirically tested using data from the 1996 Canadian Family Expenditure Survey. The results indicate that household consumption behaviour is generally explained by both hypotheses when integrated into one model, contrary to previously treating them as mutually exclusive hypotheses. [source]

Monetary Policy in a Small Open Economy with Marshallian Preferences,

THE ECONOMIC RECORD, Issue 268 2009
CONSTANTINE ANGYRIDIS
We study the effects of inflation for a small open economy when the representative agent has Marshallian preferences, with which the rate of time preference is a decreasing function of savings. An increase in the inflation rate reduces the permanent income of the representative agent, which, with Marshallian preferences, also reduces the rate of time preference. Hence, savings falls and the country runs a current account deficit. The numerical evaluations of the model suggest that inflation has significant effects on welfare in the steady state. [source]

Has social mobility in Britain decreased?

THE BRITISH JOURNAL OF SOCIOLOGY, Issue 2 2010
Reconciling divergent findings on income, class mobility
Abstract Social mobility has become a topic of central political concern. In political and also media circles it is widely believed that in Britain today mobility is in decline. However, this belief appears to be based on a single piece of research by economists that is in fact concerned with intergenerational income mobility: specifically, with the relation between family income and children's later earnings. Research by sociologists using the same data sources , the British birth cohort studies of 1958 and 1970 , but focusing on intergenerational class mobility does not reveal a decline either in total mobility rates or in underlying relative rates. The paper investigates these divergent findings. We show that they do not result from the use of different subsets of the data or of different analytical techniques. Instead, given the more stable and generally less fluid class mobility regime, it is the high level of income mobility of the 1958 cohort, rather than the lower level of the 1970 cohort, that is chiefly in need of explanation. Further analyses , including ones of the relative influence of parental class and of family income on children's educational attainment , suggest that the economists' finding of declining mobility between the two cohorts may stem, in part at least, from the fact that the family income variable for the 1958 cohort provides a less adequate measure of ,permanent income' than does that for the 1970 cohort. But, in any event, it would appear that the class mobility regime more fully captures the continuity in economic advantage and disadvantage that persists across generations. [source]