Consumption Analysis in Contemporary Japan: Where we are now in life cycle theory

Table of Contents

Systematic understanding of household behavior

How do Japanese households make consumption decisions?
This book uses “life cycle theory” to analyze, from a consistent perspective, various phenomena related to consumption in Japan, such as the consumption tax rate hike, the consumption stimulating effect of the special cash payment, the child allowance benefit issue, and the problem of insufficient living funds after retirement. This ambitious work attempts to elucidate the mechanisms by which changes in the economic environment alter household behavior.

1. (1) To comprehensively understand the significance and purpose of the “life cycle theory of consumption” today.
2. (2) Using micro data, summarize the life-cycle-based analysis of household consumption behavior.
3. (3) To summarize findings on issues related to household consumption in Japan, the potential for policy intervention, and the future outlook.

These are the three main objectives of this book, and over the past 10 years the author has used Japanese data to conduct a series of empirical studies from the perspective of life cycle theory. Demonstrating the validity of the life cycle theory is one of the central themes in applied econometrics today, and this remarkable book will be of great help in deepening our understanding of microeconometric analysis.

Part I. Decision Theory of Consumption
Chapter 1: Life Cycle Theory of Consumption
Chapter 2: Income Uncertainty and Consumption
Chapter 3: Substitution of Consumption Between Different Points in Time
Chapter 4: Interest Rates and Japanese Consumption

Part II: Validation and Extension of Life Cycle Theory
Chapter 5: Validation of Life Cycle Theory
Chapter 6: Retirement Consumption Puzzle
Chapter 7: Overreaction and Liquidity Constraints
Chapter 8: Frontiers of Life Cycle Theory

Part III: Economics of Cash Transfers
Chapter 9: Economics of Consumption Stimulation
Chapter 10: Effects of Child Allowance Benefit

Part IV: Understanding Household Income and Expenses
Chapter 11: Household Income and Expenditure in Official Statistics
Chapter 12: New Household Income and Expenditure Data

Part V. Determinants of Savings
Chapter 13: Micro and Macro Savings Rates
Chapter 14: Demographics and Savings