The Normal Income Hypothesis in Chile
Roger R. Betancourt
,
334
(
66
)
Journal of the American Statistical Association
258-263
June
1971
Abstract
This study attempts to discriminate between two of the main alternative explanations of consumption behavior, the normal income hypothesis and the current income hypothesis, with data from a survey of Chilean households. The results support the normal income hypothesis but reject the secondary hypothesis that the normal income elasticity of consumption is unity. A review of other results using comparable testing procedures and data is provided.