Humps and bumps in lifetime consumption

Orazio P. Attanasio, James Banks, Costas Meghir, Guglielmo Weber

Research output: Contribution to journalArticlepeer-review


In this article we argue that the life-cycle model that allows demographics to affect household preferences and relaxes the assumption of certainty equivalence can generate hump-shaped consumption profiles over age that are very similar to those observed in household-level data sources and, in particular, match the differences in shape across different education groups. Liquidity constraints or myopia are not required to explain the empirical features of observed life-cycle patterns.
Original languageEnglish
Pages (from-to)22-35
Number of pages13
JournalJournal of Business and Economic Statistics
Issue number1
Publication statusPublished - Jan 1999


  • Hump-shaped consumption profiles
  • Numerical solutions of life-cycle models
  • Precautionary saving


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