Consumption modelling using categorisation-enhanced mental accounting

• Autorzy: Szymon Chudziak
• Języki publikacji: EN

Abstrakty

EN

Credibly representing category-of-goods mental accounting in an intertem- poral optimisation framework is notoriously difficult, as this modelling ap- proach imposes interrelations between the demand for different categories through first-order conditions. This breaks the principle of nonfungibility, contrary to the rationale of mental-accounting theory. Proofs that using intertemporal optimisation is futile in modelling this kind of behaviour are provided, and an alternative is developed: a procedural-behavioural merger of mental accounting and categorisation theories. The merger is necessary to enhance mental-accounting theory, which by itself does not inform about how mental budgets are formed, what they include and how money is spent from various accounts. A classification of six basic consumer types was de- vised, basing on the differences between their mental-accounting systems and variations of changes of expenditure in response to variations of net disposable income and other possible stimuli. Representing the consumer problem as a behavioural procedure including spending on nondurable and frequently-bought durable goods and decisions whether or not to purchase very expensive durable goods, such as houses and flats, allows to model real-world features such as infrequent purchases and rare debt-taking. The devised working-life cycle models of consumer behaviour are consistent with microeconomic evidence on consumption, including those features that are not accounted for by various versions of the permanent income or buffer-stock models(original abstract)

Słowa kluczowe

EN

Consumption; Behavioral economics; Consumer preferences; Simulation models

PL

Konsumpcja; Ekonomia behawioralna; Preferencje konsumenta; Modele symulacyjne

• Czasopismo: Collegium of Economic Analysis SGH - Working Papers
• Rocznik: 2023
• Numer: nr 90
• Strony: 90

Twórcy

autor

Szymon Chudziak

• SGH Warsaw School of Economics

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