Center for Behavioral Decision Research

CBDR : Seminar Series : Seminar by Mel Stephens

Can Governments Help Households Smooth Consumption? Evidence from Japanese Public Pension Benefits

	presented by Mel Stephens (Carnegie Mellon University (Heinz))


	Thursday, October 16	link to paper
	12pm
	Porter 223D	link to Speaker's Site

	Abstract:

	Recent research finds that households do not "smooth" consumption between regular income receipts such as paychecks and government transfers. We examine whether the consumption response to such income payments is affected by the frequency at which these checks are delivered. We find that the consumption of Japanese households is sensitive to public pension benefit check receipt when these checks are distributed quarterly but that households smooth consumption once the payment frequency is shortened to a bi-monthly interval. Although contrary to the predictions of the Life-Cycle/Permanent Income Hypothesis, our results are consistent with a mental accounting model of self-control.

	Host at CMU: Weber