The absent-minded consumer
By: John Ameriks, Andrew Caplin, John Leahy.
Contributors: Caplin, Andrew.; Leahy, John Vincent.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10216; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10216.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Consumption (Economics) -- Econometric models.; Absent-mindedness.
Description: "We present evidence that many households have only a vague notion of what they are spending on various consumption items.  We then develop a life-cycle model that captures this absent-mindedness'.  The model generates precautionary spending, whereby absent-minded agents tend to consume more than attentive ones.  The model also predicts fluctuations over time in the level of attention, and thereby sheds new light on the sharp reduction in consumption both at retirement, and in cyclical downturns.  Finally, we find patterns of attention in the data that are consistent with those predicted by the model"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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