Income uncertainty drives Colombian households to save more, impacting consumption decisions.
The article examines how uncertainty affects saving decisions of Colombian households. They use data from surveys and find that when unemployment rates are high, households tend to save more as a precaution. However, when income variability is high, households surprisingly spend more. The researchers also discover that uncertainty has no impact on spending decisions of households who do not save. These findings suggest that uncertainty influences saving behavior in Colombia, with different effects depending on the type of uncertainty.