Wealth effects and the consumption of leisure
Subtitle: retirement decisions during the stock market boom of the 1990s
By: Julia L. Coronado and Maria Perozek.
Contributors: Perozek, Maria.
Series: Finance and economics discussion series ;; 2003-20; Finance and economics discussion series (Online) ;; 2003-20.
Publisher: Federal Reserve Board
Published: 2003
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Subjects: Wealth -- United States.; Retirement age -- United States.; Stocks -- Prices -- United States.
Description: "It is well accepted that households increase consumption of goods and services in response to an unexpected increase in wealth.  Consensus estimates of this wealth effect are in the range of 3 to 5 cents of additional consumption spending in the long run for each additional dollar of wealth.  Economic theory also suggests that consumption of leisure, like consumption of goods and services, should increase with positive shocks to wealth.  In this paper, we ask whether the run-up in equity prices during the 1990s led older workers to retire earlier than they had previously planned.  We identify the effect by exploiting unique data on retirement expectations from the Health and Retirement Survey.  Our econometric results suggest that respondents who held corporate equity immediately prior to the bull market of the 1990s retired, on average, 7 months earlier than other respondents"--Federal Reserve Board web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 7/26/2004.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.