Future Consumption (future + consumption)

Distribution by Scientific Domains


Selected Abstracts


Financial Expectations, Consumption and Saving: A Microeconomic Analysis,

FISCAL STUDIES, Issue 3 2006
Sarah Brown
Abstract We explore the determinants of individuals' financial expectations using data from the British Household Panel Survey, 1991,2003. Our findings suggest that individuals' financial predictions are influenced by both the life cycle and the business cycle. We also investigate the extent to which the accuracy of past financial expectations affects current financial expectations. Regardless of the accuracy of the prediction, past financial optimism has a positive effect on current expectations formation whilst past financial pessimism has a negative effect. We also explore the relationship between financial realisations and expectations and we find that expectations tend to fall short of financial realisations. Finally, we investigate how financial expectations influence saving and consumption. Our findings suggest that financial optimism is inversely associated with saving and that current financial expectations serve to predict future consumption. [source]


Consumer Stockpiling and Price Competition in Differentiated Markets

JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 4 2007
Liang Guo
In many storable-goods markets, firms are often aware that consumers may strategically adjust purchase timing in response to expected price dynamics. For example, in periods when prices are low, consumers stockpile for future consumption. This paper investigates the dynamic impact of consumer stockpiling on competing firms' strategic pricing decisions in differentiated markets. The necessity of equilibrium consumer storage for storable products is re-examined. It is shown that preference heterogeneity generates differential consumer stockpiling propensity, thereby intensifying future price competition. As a result, consumer storage may not necessarily arise as an equilibrium outcome. Economic forces are also investigated that may mitigate the competition-intensifying effect of consumer inventories and that, hence, may lead to equilibrium consumer storage. [source]


Sales and consumer inventory

THE RAND JOURNAL OF ECONOMICS, Issue 3 2006
Igal Hendel
Temporary price reductions (sales) are common for many goods and naturally result in a large increase in the quantity sold. We explore whether the data support the hypothesis that these increases are, at least partly, due to demand anticipation: at low prices, consumers store for future consumption. This effect, if present, has broad economic implications. We test the predictions of an inventory model using scanner data with two years of household purchases. The results are consistent with an inventory model and suggest that static demand estimates may overestimate price sensitivity. [source]


ENDOGENOUS BUSINESS CYCLES: THE INFLUENCE OF CHARACTER TRAITS,

AUSTRALIAN ECONOMIC PAPERS, Issue 1 2009
FUJIO TAKATA
This article deals with how business cycles can occur, in light of character traits which influence individual behaviour in an economy. We assume an overlapping generations model in which every consumer has identical instantaneous utility which is additively separable with respect to time. The parameters of utility here include character traits which influence the choice between consumption and savings. In this situation, young individuals choose between current consumption and current savings which lead to future consumption in their old age. Individual character traits, which appear both in the shape of utility functions and in evaluations about utility in the future, affect these choices. And since these choices determine savings, individual character traits can eventually determine how our economy moves. Focusing on the relationship between individual character traits and savings formation, we demonstrate that endogenous business cycles with two periods can occur, in an economy comprised of individuals who opt for current consumption and who are careless in relation to future events, like Aesopian grasshoppers, and in other cases they do not. [source]


Forecasting total and industrial sector electricity demand based on genetic algorithm approach: Turkey case study

INTERNATIONAL JOURNAL OF ENERGY RESEARCH, Issue 9 2005
Harun Kemal Ozturk
Abstract This study deals with estimation of the total and industrial sector electricity consumption based on genetic algorithm (GA) approach, and then proposes two scenarios to project future consumptions. Total electricity consumption is estimated based on gross national product (GNP), population, import and export figures of Turkey. Industrial sector electricity is calculated based on the GNP, import and export figures. Three forms of the genetic algorithm electricity demand (GAED) models for the total and two forms for the industrial electricity consumption are developed. The best-fit GAED model in terms of total minimum relative average errors between observed and estimated values is selected for future demand estimation. ,High- and low-growth scenarios' are proposed for predicting the future electricity consumption. Results showed that the GAED estimates the electricity demand in comparison with the other electricity demand projections. The GAED model plans electricity demand of Turkey until 2020. Copyright 2005 John Wiley & Sons, Ltd. [source]


Comonotonic Approximations for Optimal Portfolio Selection Problems

JOURNAL OF RISK AND INSURANCE, Issue 2 2005
J. Dhaene
We investigate multiperiod portfolio selection problems in a Black and Scholes type market where a basket of 1 riskfree and m risky securities are traded continuously. We look for the optimal allocation of wealth within the class of "constant mix" portfolios. First, we consider the portfolio selection problem of a decision maker who invests money at predetermined points in time in order to obtain a target capital at the end of the time period under consideration. A second problem concerns a decision maker who invests some amount of money (the initial wealth or provision) in order to be able to fullfil a series of future consumptions or payment obligations. Several optimality criteria and their interpretation within Yaari's dual theory of choice under risk are presented. For both selection problems, we propose accurate approximations based on the concept of comonotonicity, as studied in Dhaene et al. (2002 a,b). Our analytical approach avoids simulation, and hence reduces the computing effort drastically. [source]