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Title: Household Wealth Accumulation during Periods of Inflation: Some Evidence from Longitudinal Data
Resulting in 1 citation.
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Jianakoplos, Nancy Ammon |
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Household Wealth Accumulation during Periods of Inflation: Some Evidence from Longitudinal Data Ph.D. Dissertation, The Ohio State University, 1983 Cohort(s): Older Men Publisher: UMI - University Microfilms, Bell and Howell Information and Learning Keyword(s): Assets; Behavior; Family Resources; Household Income; Inflation; Life Cycle Research; Wealth This study focuses on the effect of anticipated and unanticipated, inflation-related and real capital gains and losses on the accumulation of wealth by individual households. The ex post change in individual-household wealth, or saving, is hypothesized to be positively related to the quantity of unanticipated, inflation-related, real capital gains accruing to households. Similarly, individual-household saving is predicted to vary inversely with the quantity of anticipated, inflation-related, real capital gains which households experience. Measures of anticipated and unanticipated, inflation-related, real capital gains are incorporated into a life-cycle model of individual-household saving behavior. An individual-household saving function is estimated empirically using panel data from the NLS of Older Men. The parameters of the saving function, over the intervals 1966-1971 and 1971-1976, are estimated separately and in a pooled cross-section and time-series model. The preponderance of the empirical estimates support the hypothesized relationships. The greater-than-predicted magnitudes of the coefficient estimates associated with the unanticipated capital gains variable suggest that changes in wealth resulting from capital gains are not quickly recognized and are not easily rechannelled into consumption spending. The greater-than-predicted wealth accumulation out of capital gains can be interpreted as partially offsetting the less-than-predicted saving out of expected earnings and net worth estimated in the regressions. The results indicate that households respond to inflation-induced wealth changes by substituting saving from the appreciation of existing assets for the acquisition of new assets. The measures of real capital gains capture the influence of the composition, as well as the magnitude, of individual-household wealth. Including measures of real capital gains in a life-cycle model of individual household wealth a ccumulation improves the explanatory power of the model. The significance of both of the capital gains variables emphasizes the importance of distinguishing between anticipated and unanticipated real capital gains when examining the determinants of individual-household saving behavior. |
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Bibliography Citation
Jianakoplos, Nancy Ammon. Household Wealth Accumulation during Periods of Inflation: Some Evidence from Longitudinal Data. Ph.D. Dissertation, The Ohio State University, 1983. |