Household spending patterns explained: Durable goods costs drive consumption disparities.
The article explores why people spend more on durable items like cars and appliances compared to everyday items like groceries. By analyzing household spending data, the researchers found that the costs of adjusting to buy durable goods play a big role in this difference. They used a method called simulated method of moments to estimate these costs. The study also looked at how people's spending changes when their income goes up or down.