Abstract
This paper develops and tests a model of consumption under uncertainty. The role of emotion is incorporated into the permanent income or life cycle theory of consumption (income-based model). An empirical test using structural equation modeling and China’s consumer survey data (N = 6993) showed that our consumption model with anticipatory feelings performed significantly better than pure income-based consumption models. Our results have practical application for policy formulation in China.
| Original language | English |
|---|---|
| Pages (from-to) | 95-104 |
| Number of pages | 10 |
| Journal | International Journal of Economics and Finance |
| Volume | 5 |
| Issue number | 11 |
| Early online date | 26 Oct 2013 |
| DOIs | |
| Publication status | Published - Oct 2013 |
Bibliographical note
This research was supported by a research grant from Lingnan University (Grant Number DR09D4).Keywords
- China
- consumption
- emotion
- financial crisis
- policy
- structural equation modeling