This paper analyzes habit formation in consumption for the demand block of a small-scale macro model as in Fuhrer (2000). The applied empirical method of indirect inference provides a limited information strategy for estimating a partial equilibrium model. Preliminary estimates of the model parameters for the United States and for the Euro Area are presented, confirming the importance of habit ...

We develop a model capturing habit-formation, projection-bias, and presentbias in an intertemporal-choice setting, and conduct a field experiment to identify its main parameters. Building on the Charness and Gneezy (2009) paradigm, we incentivize subjects to attend the gym for a month, observe their preand post-treatment attendance relative to a control group, and elicit their preand post-treat...

JEL classification: F32 F41 E32 In a recent paper, Gruber (Gruber, J.W., 2004. A present value test of habits and the current account. Journal of Monetary Economics 51, 1495–1507) claims that habit formation in consumption plays an important role in current account fluctuations in selected developed countries, extending the present-value model of the current account (PVM) with consumption habit...

In a quota sample of 334 Belgian individuals, reliable and valid scales are developed, that measure subjective, personal, normative and descriptive norms, personal identity, attitude components, perceived behavioral control, habit formation, behavioral intention and behavior with respect to speeding. A speeding behavior model is built in which the relevance of personal, descriptive and normativ...

Motivated by the success of internal habit formation preferences in explaining asset pricing puzzles, we introduce these preferences in a life-cycle model of consumption and portfolio choice with liquidity constraints, undiversifiable labor income risk and stock-market participation costs. In contrast to the initial motivation, we find that the model is not able to simultaneously match two very...