The Consumption Function as a Tool for Prediction

Davis, Tom E.

doi:10.2307/1925635

Cited by 41 publications

(12 citation statements)

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“…Associated with this research are empirical studies such as Spanos (1989) and Cook (2000) which, although not considered by Clemens (2017), give differing illustrations of the importance of clarifying the notion of replication. More precisely, Spanos (1989) revisited the work of Davis (1952) by using a revised version of the same data but new econometric consumption function models, finding that a misguided 'stylised history' of the consumption function had evolved as a result of the simplistic nature of the econometric models considered. In contrast, Cook (2000) reconsidered the early empirical debates on the cyclical nature of the marginal propensity to consume to support the use of the simple model of Woytinsky (1946) using the author's original data.…”

Section: Replication In Economics and Other Disciplinesmentioning

confidence: 99%

Replicating rockets and feathers

Cook

Fosten

2019

Energy Economics

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This paper revisits the literature of asymmetric adjustment in gasoline and diesel prices, also known as the 'rockets and feathers' hypothesis, to consider the issue of the replication of empirical research. We examine the notion of replication versus robustness proposed by Clemens (2017) and add to the literature with a further review of recent and historic work on replication in economics and other disciplines. We then focus on the rockets and feathers literature, finding that the majority of empirical work performs robustness checks rather than replication of earlier papers. We perform two contrasting replication case studies motivated by the ideas of misspecification analysis, dynamic specification, mark-up, pass-through and asymmetric adjustment. In the first case study we find that results are both replicable and robust, even when data specifications are not identical. However, in the second case study we find that the results using the original sample are overturned when reanalysing the problem using an improved model specification. Furthermore, when extending the sample with more recent data and using a more sophisticated method, asymmetry is detected in both petrol and diesel pricing; different to the findings of the original study. Particular care must be taken in future rockets and feathers replications with regard to model specification and methodology. JEL Classification: C22, C52, Q41

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Section: Replication In Economics and Other Disciplinesmentioning

confidence: 99%

Replicating rockets and feathers

Cook

Fosten

2019

Energy Economics

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“…Consumption was systematically under-predicted and saving over-predicted. This implied that C was not a stable function of Y (Davis, 1952). A second problem was Kuznets's (1946) empirical finding that the APC was constant over the longrun (contrary to the hypothecated 0 ) (…”

Section: Literature Reviewmentioning

confidence: 98%

Kuwaiti Consumption in the Presence of Dramatic Economic Events: 1973-2003

Packey¹,

Nasair²

2009

Review of Middle East Economics and Finance

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“…Thus, the authors have concluded that Keynes" AIH could be used in the estimation of consumer behavior (Pehlivan and Utkulu, 2007). In another study, Davis (1952), using the US annual real consumption and real disposable income data over the 1929-1940 period has presented evidences not contradicting with AIH. However, in the following periods, more studies presented evidences showing that, when tested with long term annual data, the consumption function appeared to be misspecified, which is commonly called as "the consumption puzzle" (Mankiw, 1992).…”

Section: Introductionmentioning

confidence: 93%