Systems testing of wealth-aggregation restrictions in an integrated model of expenditure and asset behavior

Owen, P. Dorian

doi:10.1080/00036848500000070

Applied Economics

1985

DOI: 10.1080/00036848500000070

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Systems testing of wealth-aggregation restrictions in an integrated model of expenditure and asset behavior

P. Dorian Owen

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1986

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Cited by 3 publications

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“…H . MOLANA although Backus and Purvis (1980), Backus, Brainard, Smith and Tobin (1980), and especially Owen (1985 and can be seen as attempts in that direction. Owen uses the U.K. data to estimate the system of equations corresponding to the allocation of funds in the personal sector and tests the wealth-aggregation restrictions in order to investigate the impact of wealth composition on consumers' expenditure.…”

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confidence: 99%

Wealth Allocation, Capital Gains and Private Expenditure in the Uk

Molana

1989

Scottish J Political Eco

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mentioning

confidence: 99%

Wealth Allocation, Capital Gains and Private Expenditure in the Uk

Molana

1989

Scottish J Political Eco

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Can portfolio adjustments explain deviations of consumption from permanent income?

MacDonald

Molana

2004

The North American Journal of Economics and Finance

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Wealth‐composition and Cross‐equation Effects in the U.K. Personal Sectors Expenditure and Portfolio Behaviour

Owen

1986

The Manchester School

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There has been much recent interest in the effect of the level of wealth holdings on consumed expenditure. Numerous empirical studies have been reported in the literature including Jonson (1976) ; Townend (1976) ; Davidson, Hendry, Srba and Ye0 (1978); Bean (1978); Hendry and von Ungern-Sternberg (1981), etc. Although these studies look at the infiuence of different aspects of the portfolio on expenditure (with particular emphasis on liquid assets), the approaches adopted have little to say on the determinants of saving or portfolio behaviour. This tendency of the literature on consumers' expenditure to treat savings as a residual is mirrored by the tendency of the literature on portfolio allocation to take savings and, hence, wealth as given and concentrate on the allocation of net wealth between different assets and liabilities, e.g., Brainard and Tobin (1968); Backus, Brainard, Smith and Tobin (1980) ; Kopcke (1977) ; Saito (1977), etc. A more reasonable approach is to treat the decision to save and decisions on the magnitude and form that such savings take aa inextricably linked with expenditure decisions.Hence, if wealth or liquid asset holdings are believed to be important in explaining expenditure, an appropriate framework in which to analyse this issue is one which embodies conscious savinga and portfolio allocation decisions and allows for interrelationships between expenditure and portfolio composition. It is also important to note that emphasis of certain wealth components and neglect of others is a simplifying abstraction. Disequilibrium in consumed w e t s and liabilities other than liquid assets can affect their *Manuscript received 6.9.83; final version weived 16.11.84. tl a m grateful to Michael Artis and two referees for helpful comment8 on an earlier veraion of this paper. 65

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Systems testing of wealth-aggregation restrictions in an integrated model of expenditure and asset behavior

Cited by 3 publications

References 19 publications

Wealth Allocation, Capital Gains and Private Expenditure in the Uk

Wealth Allocation, Capital Gains and Private Expenditure in the Uk

Can portfolio adjustments explain deviations of consumption from permanent income?

Wealth‐composition and Cross‐equation Effects in the U.K. Personal Sectors Expenditure and Portfolio Behaviour

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