To request a sample copy of JCA, or for price and ordering information to obtain single copies of back issues, contact ACCI . An empirical analysis of data from the U.S. Consumer Expenditure Survey, Interview Survey, from 1987-1989, reveals that there is considerable heterogeneity across disaggregate goods and across households in the frequency of expenditure. Issues of data quality and of the implications of the period of observation for Tobit analysis are also discussed. Although the expanded EITC reduces implicit tax rates for the typical welfare household at very low levels of earnings, implicit tax rates are still found to be substantial, especially when work and child care costs are included. One explanation is bank card consumer irrationality, a potentially significant market failure requiring government intervention.
Alternate explanations focus on efficient market forces.
The 1989 Federal Reserve Survey of Consumer Finances data are not consistent with the consumer irrationality hypothesis. The data are consistent with a market-based model of demand for balances and suggest that consumers may rationally eschew search because small outstanding balances imply low returns to search. It incorporates and contrasts economic incentives for search with noneconomic involvement-based motivations and perceived versus actual costs associated with search. Data used in the analysis were collected in a large midwestern city during 1990. Pre-store search activities were found to be driven by time, monetary, and mobility constraints.