%0 Report
        %A Huffman, David B.
%A Barenstein, Matias
        %T Riches to Rags Every Month? The Fall in Consumption Expenditures Between Paydays
        %D 2004
        %8 2004 Dec
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 1430
        %U https://www.iza.org/publications/dp1430
        %X This paper finds declining consumption expenditure between paydays, for a typical household in the working population of the UK. The magnitude is inconsistent with exponential time preference, but compatible with quasi-hyperbolic discounting. However, the hyperbolic model predicts that credit constraints drive the decline, and we find only mixed evidence in this regard. We also observe a method-of-payment result that suggests a role for mental accounting: households choose declining cash spending but flat credit-card spending over the pay period. We propose an alternative explanation for the results, based on cognitive costs of budgeting and perceptual biases, rather than self-control problems.
        %K consumption
%K hyperbolic-discounting
%K mental accounting
%K payday
%K reference-dependent preferences
%K credit cards