TY  - UNPD
A1  - Jappelli, Tullio
A1  - Padula, Mario
A1  - Pistaferri, Luigi
T1  - A direct test of the buffer-stock model of saving
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2007,29
N2  - Recent models with liquidity constraints and impatience emphasize that consumers use savings to buffer income fluctuations. When wealth is below an optimal target, consumers try to increase their buffer stock of wealth by saving more. When it is above target, they increase consumption. This important implication of the buffer stock model of saving has not been subject to direct empirical testing. We derive from the model an appropriate theoretical restriction and test it using data on working-age individuals drawn from the 2002 and 2004 Italian Surveys of Household Income and Wealth. One of the most appealing features of the survey is that it has data on the amount of wealth held for precautionary purposes, which we interpret as target wealth in a buffer stock model. The test results do not support buffer stock behavior, even among population groups that are more likely, a priori, to display such behavior. The saving behavior of young households is instead consistent with models in which impatience, relative to prudence, is not as high as in buffer stock models. JEL Classification: D91
T3  - CFS working paper series - 2007, 29 
KW  - Buffer Stock Model
KW  - Precautionary Saving
KW  - Intertemporal Choice
KW  - Sparen
KW  - Puffer
Y1  - 2007
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/395
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-51001
IS  - July 2007
ER  -