PhD defence: Essays on Households' Intertemporal Resource Allocation

On Friday 25 September 2015 Agnes Kovacs will hold a trial lecture on a prescribed topic and defend her thesis "Essays on Households' Intertemporal Resource Allocation" for the PhD degree at NHH.

17.09.2015 - Ed.

The thesis consists of three papers on topics related to intertemporal resource allocation over the lifecycle. The first two chapters are concerned with the question of how important role illiquid housing asset plays as commitment device in households' intertemporal consumption decision. The first chapter introduces illiquid housing asset in a standard life-cycle model with temptation preferences and self-control. Then it takes the model to data by estimating the model's preference parameters from US micro data. The second chapter provides numerical simulations of the model using the estimated preference parameters from the first chapter in order to quantify the effect of housing asset.

The main conclusions of the first two chapters can be summarized as follows. First, there is strong supporting evidence in favor of the temptation model. Second, given that households have temptation preferences, they intensively use housing asset as commitment device in order to avoid future overconsumption.

The last chapter of the thesis estimates Euler equations using household-level survey data as measures of expectations. It disentangles transitory and permanent income shocks from available survey income expectation data and then uses these shocks as proxies for expectational errors in the conventional Euler equation.

This chapter shows compelling evidence, that households can perfectly insulate themselves from transitory income fluctuations, while they respond to permanent income shocks by changing their consumption. The estimated response is small though, which suggests that households have access to different alternatives of insurance beyond what savings and borrowing allows them.

The defence

Title of the thesis: "Essays on Households' Intertemporal Resource Allocation"
Time and place for the defence: 12:15 in Kristian Gerhard Jebsen Centre, NHH

Trial lecture

The prescribed topic for the trial lecture is "Housing and consumption: Theoretical insights and selected evidence
Time of the trial lecture: 10:15 Kristian Gerhard Jebsen Centre, NHH

Both the trial lecture and the defence are open to everyone.

Evaluation committee

Chair: Professor Øystein Thøgersen, NHH
Professor Morten O. Ravn, University College London
Professor Guglielmo Weber, University of Padua

Supervising committee

Krisztina Molnar, Department of Economics, NHH (principal supervisor)
Professor Orazio Attanasio, University College London