An Intertemporal Analysis of Households Consumption Decisions Among Staff of University of Uyo, Nigeria

This study explores the factors shaping how staff of the University of Uyo make intertemporal consumption choices. Data were gathered from 37 respondents across academic and non-academic units, covering their current and expected income, years of service, age, savings plans, present and future consumption, and utility rankings. Using this information, intertemporal consumption, savings, and utility functions were estimated for two periods: the present period, defined by each respondent’s current rank and income, and the future period, tied to their next promotion and expected earnings. The findings reveal that current income and age play central roles in influencing both consumption and saving behavior. Evidence from the Euler equation suggests that the expected marginal utility of future consumption exceeds that of the present, implying a stronger incentive to save now for higher future satisfaction. The study highlights the importance of sound financial planning and supportive welfare policies to promote smoother consumption over time.

Consumption, Savings, intertemporal choice, utility maximization

1. Ascari, G ; Magnussonc, L and Mavroeidis, S. (2019). Empirical evidence on the Euler equation for consumption in the US, Journal of Monetary Economics 117 (2021): 129–152 [Google Scholar] [Crossref]

2. Attanasio, P and Paiella, M(2006). Intertemporal Consumption Choices, Transaction Costs and Limited Participation to Financial Markets: Reconciling Data and Theory. National Bureau of Economic Research (NBER) Working Paper 12412 [Google Scholar] [Crossref]

3. Bhatia, H.L. (2006). History of Economic Thought, 4th Edition, New Delhi: Vikas Publishing House PVT. [Google Scholar] [Crossref]

4. Campbell, J. and Mankiw, N. (1989). Consumption, income, and interest rates: Reinterpreting the time series evidence, in NBER Macroeconomics Annual, eds. O. Blanchard, and S. Fischer, Cambridge, MA: MIT Press, 185—216. [Google Scholar] [Crossref]

5. Campbell, J and Mankiw, N. (1990). Permanent income, current income and consumption, Journal of Business and Economic Statistics 8, 265—279. [Google Scholar] [Crossref]

6. Cnova, F. and Ravn, M. (1996). International consumption risk sharing, International Economic Review 37, 573—601. [Google Scholar] [Crossref]

7. Campbell, J. and Deaton, A.(1989), Why is consumption so smooth?, Review of Economic Studies 56, 357—373. [Google Scholar] [Crossref]

8. Carroll, C. (1997). Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis,Quarterly Journal of Economics 112, 1—56. [Google Scholar] [Crossref]

9. Dohmen, Thomas., et.al. (2012). Interpreting Time-Horizon Effects in Inter-temporal Choice. Institute of the study of labour(IZA) Disussion Paper No 6385 [Google Scholar] [Crossref]

10. Hall, R. E. (1988). Intertemporal Substitution in Consumption. Journal of the Political Economy, 96(2): 339-357 [Google Scholar] [Crossref]

11. Karlsson, Niklas, et.al. (1995). Explanations of Effects of Prior Outcomes on Intertemporal Choices. Retrieved from: http://www.gu.se/digitalAssets/1286/1286082_gpr97_nr4.pdf [Google Scholar] [Crossref]

12. Loewenstein, G. (1998). Frames of Mind in Intertemporal Choice. Management Science 34(2): 200-214 [Google Scholar] [Crossref]

13. Levin, L. (1998). Are assets fungible Testing the behavioral life-cycle saving. Retrieved from:http://www.econ2.jhu.edu/people/ccarroll/papers/COS-WealthEffectsLiterature/Papers/Levin.pdf [Google Scholar] [Crossref]

14. Mankiw, N., Rotemberg, J. and Summers, L.( 1985). Intertemporal substitution in macroeconomics, Quarterly Journal of Economics 100, 225—251. [Google Scholar] [Crossref]

15. Mazzocco, M (2002). Household Intertemporal Behavior: a Collective Approach, Working Paper, University of Wisconsin. [Google Scholar] [Crossref]

16. Palley, T.I. (2005). Relative, Permanent Income and Consumption: A Synthesis of Keynes, Duesenberry, Friedman and Modigliani and Brumberg. Washington, DC, 20010, pp.1-23 [Google Scholar] [Crossref]

17. Samuelson, P and Nordhaus, P (2009). Economics, Mc Graw Hill Publishers, New York Stover, B. (2012). The Influence of Age on Consumption. Retrieved from: https://ideas.repec.org/p/ekd/002672/3808.html [Google Scholar] [Crossref]

18. Thaler, Richard. (1979). Towards a Positive Theory of Consumer Choice. Retrieved from: http://www.eief.it/butler/files/2009/11/thaler80.pdf [Google Scholar] [Crossref]

19. Weber, E., et.al. (2007). Asymmetric Discounting in Intertemporal Choice. Retrieved from: http://www.dangoldstein.com/papers/WeberJohnsonMilchChangBrodschollGoldstein_AsymDiscIntrtmpChoice_PsychSci07.pdf [Google Scholar] [Crossref]

• Impact of Foreign Direct Investment in India
• Issues Involved in Digitalisation Special Reference to Indian Tourism Growth
• Relationship Marketing and Customer Loyalty in the Fast-Moving Consumer Goods (FMCG) Industry in Nairobi County
• Financial Literacy or Financial Inclusion? Which is Which, What is What—To Achieve Uganda’s 10-Fold Economic Growth By 2040
• Harnessing Natural Gas for Economic Transformation: Overcoming the Regulatory and Infrastructural Bottlenecks in Nigeria