Developing a model that investigates the effects of voluntary superannuation contributions on household consumption before and after a global financial crisis.
- How does voluntary superannuation influence household consumption, i.e. owning or investing in landed property, equity, and durable and non-durable goods?
- Have Australians' saving attitude changed since the global financial crisis in 2009 and how such change has affected their consumption? If so, to what extent?
To examine voluntary superannuation in Australia and its impact on consumption for different demographic groups, we will develop a modified consumption model from the Malley and Molana (2006) model. It assumes that changes in life-time income, accumulations of wealth and past consumption have impacts on current consumption. Mathematically, the model is expressed as follows:
This project will employ longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) survey to generate estimations. The estimations will then be used to conduct forecasts. Unlike time-series data, the longitudinal data provides more detailed information about each household's expenditure and wealth across different time periods. For instance, a longitudinal households' consumption consists of data that reveals the types of households and how each household category changed their consumption patterns across different time.
The research methodology is divided into three stages:
Stage 1 - At the first stage, the study will conduct statistical regressions to generate the coefficients for Model 1. During this stage, several statistical diagnostic tests will be carried out to ensure the coefficients are reliable and accurate. The tests are able to detect econometric modelling issues such as misspecification, unit root, heteroskedasticity, serial correlation and predictive power. The principal reason is to ensure that Model 1 does not omit important variables and can produce reliable forecasts. We expect to spend the first four months (from March to June 2012) to complete the stage 1 process.
- Malley, J. & H. Molana (2006), "Further evidence from aggregate data on the life-cycle-permanent-income model", Empirical Economics, 31, 1025-1041.
- Morley, C. L. (1998), "A dynamic international demand model", Annals of Tourism Research, 25, 70-84.
- Song, H. & K. K. F. Wong (2003), "Tourism demand modelling: A time-varying parameter approach", Journal of Travel Research, 42, 57-64.
Dr Ghialy Yap (Chief Investigator)
Professor David Allen (Mentor)
Edith Cowan University (2012 Early Career Researcher Grant)
March 2012 - February 2013