A Statistical analysis of Consumer Behavior Using Laboratory Experimental Data

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Author	Naziha Kasraoui, Ka�s Ben Ahmed
ISSN	2307-2466
On Pages	34-42
Volume No.	3
Issue No.	1
Issue Date	February 01, 2020
Publishing Date	February 01, 2020
Keywords	Consumption, Habit formation, Behavior, Experimental Economic Method, Nonparametric test, Tunisia.

Abstract

Experimental economics is used here to solve some discussions provided by many studies about habit formation problems for infinitely-lived agents whose preferences certainty exhibit in the presence of labor income. The standard approach to modeling consumption behavior is to assume that consumers are solving dynamic optimization problems. However, under realistic descriptions of utility and certainty income and habit formation--these problems are very difficult to solve. We demonstrated that experimental economic method found here yields a better assessment of the habit formation at the behaviors of consumers. The present paper reports on the results of an experiment based on consumer behavior. This experiment is carried out with 66 agents organized in two experimental sessions. Using an experimental approach and applying nonparametric tests, results show that into the presence of labor income certainty consumption framework, participants' actual spending behavior converged effectively towards optimal consumption. Consumers persistently spend too much in early periods, they learn rapidly from their own experience to consume the same choice of meals and drinks. Nonparametric tests indicate that behavioral influences sharply affect decisions of consumers (p-value >5%) in the second and the third period. Their spending is closely linked to optimal consumption (non conditional on earlier spending) and they choose the same basket of goods in the future horizon, which shows that there's a habit formation in the behaviors of consumers.

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