Why Don't Households Smooth Consumption? Evidence from a 25 Million Dollar Experiment

For helpful comments, I thank Christian Broda, Chris Carroll, Peter Hansen, John Heaton, Olivia Kim, Holger Mueller, Nicholas Souleles, Jeremy Tobacman, Steven Zeldes, the referees at this Journal, two anonymous referees on the survey grant application, and participants at seminars the Consumer Financial Protection Bureau, the Federal Reserve Bank of Boston, Chicago, Columbia, Harvard, MIT, NYU, Pennsylvania, Stanford, Yale, and the NBER Household Finance meetings July 2014. I thank the MIT Sloan School of Management, the Kellogg School of Management at Northwestern University, the Initiative for Global Markets at the University of Chicago, and the Zell Center at the Kellogg School of Management for funding. I thank Ed Grove, Matt Knain and Molly Hagen at Nielsen for their work on the survey and their careful explanation of the Nielsen Consumer Panel. The results of this paper are calculated based on data from The Nielsen Company (U.S.) LLC and provided by the Marketing Data Center and the University of Chicago Booth School of Business. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.

• online appendix

• July 14, 2015