Discussion Papers no. 308
Are predicted lifetime consumption profiles robust with respect to model specifications?
Structural models of lifetime labour supply and consumption require functional specifications of preferences as well as other assumptions that can be difficult to assess a priori. Misspecifications of the model might lead to biases in the estimates of preferences, that may influence the simulation results obtained from the model. In this paper we study to what extent predicted distributions of lifetime consumption are robust with respect to the specification of preferences. The simulation results show that simulated distributions of lifetime consumption strongly depend on the estimate of the intertemporal substitution rate as well as on the estimate of the time preference rate relative to the marginal interest rate net of taxes.
Om publikasjonen
- Tittel
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Are predicted lifetime consumption profiles robust with respect to model specifications?
- Ansvarlig
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Tom Kornstad
- Serie og -nummer
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Discussion Papers no. 308
- Utgiver
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Statistics Norway, Research Department
- Emne
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Discussion Papers
- Antall sider
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19
- Målform
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Engelsk
- Om Discussion Papers
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Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.
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