RDP 9602: Consumption and Liquidity Constraints in Australia and East Asia: Does Financial Integration Matter? Appendix B: Estimation Results
May 1996
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(1)  (2)  (3)  (4)  (5)  

Nondur (PFC def) constraint defined as income growth 1970–1994  Nondur & services, constraint defined as income growth 1975–1994  Total consumption, constraint defined as income growth 1965–1994 
Total consumption, constraint defined as income growth 1965–1994 
Total consumption, constraint defined as income growth 1965–1994 

Constant  1.61 (1.52) 
0.012^{**} (0.003)  −0.25 (0.17) 
−0.01 (0.13) 
0.14 (0.18) 
Log income (t1) 
0.14^{**} (0.05) 
0.44^{**} (0.17) 
0.19^{*} (0.10) 
0.38^{**} (0.17) 

Log consumption (t1) 
−0.37 (0.22) 
−0.41^{**} (0.15) 
−0.18^{*} (0.09) 
−0.37^{**} (0.16) 

Inflation rate (t) 
−0.30^{**} (0.12) 
−0.24^{*} (0.13) 

Age 20–29 / age 20–64 (t) 
−0.34^{*} (0.19) 

Liquidity constraint (t) 
0.32^{*} (0.163) 
0.43^{**} (0.12) 
0.56^{**} (0.12) 

Liquidity constraint (t)(70s)  0.55^{**} (0.24) 
0.41^{**} (0.16) 

Liquidity constraint (t)(80s)  0.38 (0.30) 
0.66^{**} (0.24) 

Rbarsquared  0.186  0.198  0.511  0.480  0.563 
Standard error  0.0151  0.0098  0.0100  0.092  
Misspecification  χ^{2}(10)=4.2 (0.939)  χ^{2}(4)=1.0 (0.918)  χ^{2}(10)=15 (0.120)  χ^{2}(11)=18^{*} (0.092)  χ^{2}(6)=2.7 (0.841) 
Serial correlation (χ^{2}(1)) 
1.10 (0.294) 
1.98 (0.159) 
2.05 (0.152) 
0.09 (0.765) 
0.26 (0.612) 
Functional form (χ^{2}(1)) 
0.00 (0.968) 
0.32 (0.574) 
0.00 (0.999) 
0.93 (0.335) 
0.01 (0.915) 
Normality (χ^{2}(2)) 
0.24 (0.886) 
0.79 (0.674) 
1.52 (0.469) 
0.12 (0.943) 
1.02 (0.600) 
Heteroscedasticity (χ^{2}(1)) 
0.41 (0.520) 
0.01 (0.904) 
1.57 (0.219) 
0.69 (0.405) 
0.20 (0.658) 
Note: Value in parenthesis after estimated coefficient is standard error, value in parenthesis after chisquare diagnostic statistic is marginal significance level; ** indicates significant at 5%,* indicates significant at 10%. 
Constraint defined as loan rate  

Constant  1.16 (0.70) 
Log income (t1) 
0.24^{*} (0.12) 
Log consumption (t1) 
−0.38^{*} (0.19) 
Liquidity constraint (t) 
−0.95^{**} (0.43) 
Rbarsquared  0.234 
Standard error  0.0534 
Misspecification  χ^{2}(7)=11.37 (0.123) 
Serial correlation (χ^{2}(1)) 
6.32 (0.012) 
Functional form (χ^{2}(1)) 
0.36 (0.547) 
Normality (χ^{2}(2)) 
1.02 (0.601) 
Heteroscedasticity (χ^{2}(1)) 
0.00 (0.995) 
Note: Value in parenthesis after estimated coefficient is standard error, value in parenthesis after chisquare diagnostic statistic is marginal significance level; ** indicates significant at 5%,* indicates significant at 10%. 
(1)  (2)  (3)  (4)  (5)  

Constraint defined as income growth  Constraint defined as money/GDP  Constraint defined as real land prices  Constraint defined as income growth  Constraint defined as real land prices  
Constant  1.32^{**} (0.25) 
1.95^{**} (0.31) 
2.18^{**} (0.26) 
0.95^{**} (0.32) 
2.35^{**} (0.29) 
Log income (t1) 
0.32^{**} (0.10) 
0.16 (0.11) 
0.32^{**} (0.08) 
0.37^{**} (0.11) 
0.39^{**} (0.09) 
Log consumption (t1)  −0.60^{**} (0.15) 
−0.53^{**} (0.16) 
−0.76^{**} (0.13) 
−0.61^{**} (0.18) 
−0.86^{**} (0.14) 
Real deposit rate (t)  0.24^{**} (0.07) 
0.24^{**} (0.08) 
0.39^{**} (0.07) 
0.26^{**} (0.08) 
0.39^{**} (0.07) 
Ddepend (t) 
−5.18^{*} (2.45) 
−4.59^{*} (2.59) 
−3.04 (2.11) 

Liquidity constraint (t)  0.36^{**} (0.15) 
0.13^{**} (0.05) 
0.001^{**} (0.0002) 

Liquidity constraint (t)(70s)  0.55^{**} (0.13) 
0.0010^{**} (0.0002) 

Liquidity constraint (t)(80s)  0.40^{*} (0.20) 
0.0011^{**} (0.0002) 

Rbarsquared  0.762  0.716  0.829  0.660  0.803 
Standard error  0.0074  0.0081  0.0062  0.0088  0.0067 
Misspecification  χ^{2}(5)=3.20 (0.669) 
χ^{2}(6)=6.50 (0.370) 
χ^{2}(6)=6.32 (0.388) 
χ^{2}(12)=7.4 (0.687) 
χ^{2}(12)=10 (0.615) 
Serial correlation (χ^{2}(1))  0.51 (0.475) 
0.04 (0.844) 
0.17 (0.684) 
0.84 (0.559) 
0.10 (0.741) 
Functional form (χ^{2}(1))  0.00 (0.991) 
0.22 (0.642) 
0.02 (0.879) 
0.71 (0.400) 
0.35 (0.556) 
Normality (χ^{2}(2)) 
1.47 (0.479) 
1.15 (0.563) 
1.12 (0.572) 
0.14 (0.934) 
0.87 (0.647) 
Heteroscedasticity (χ^{2}(1))  0.10 (0.757) 
2.97^{*} (0.085) 
0.73 (0.392) 
1.03 (0.311) 
0.92 (0.337) 
Note: Value in parenthesis after estimated coefficient is standard error, value in parenthesis after chisquare diagnostic statistic is marginal significance level; ** indicates significant at 5%,* indicates significant at 10%. 
(1)  (2)  (3)  

Constraint defined as income growth  Constraint defined as loan rate (OLS estimation)  Constraint defined as income growth  
Constant  0.52^{**} (0.23) 
1.13^{**} (0.38) 
0.49^{**} (0.23) 
Log income (t1) 
0.18^{**} (0.06) 
0.23^{**} (0.09) 
0.19^{**} (0.06) 
Log consumption (t1) 
−0.29^{**} (0.11) 
−0.43^{**} (0.16) 
−0.29^{**} (0.10) 
Liquidity constraint (t) 
0.20^{**} (0.09) 
−0.22^{**} (0.08) 

Liquidity constraint (t)(70s) 
0.39^{**} (0.08) 

Liquidity constraint (t)(80s) 
0.35^{**} (0.08) 

Rbarsquared  0.654  0.337  0.686 
Standard error  0.0137  0.0189  0.0130 
Misspecification  χ^{2}(5)=1.20 (0.945) 
n/a  χ^{2}(6)=8.34 (0.214) 
Serial correlation (χ^{2}(1)) 
0.59 (0.443) 
0.78 (0.378) 
0.50 (0.478) 
Functional form (χ^{2}(1)) 
2.42 (0.120) 
0.00 (0.953) 
3.15^{*} (0.076) 
Normality (χ^{2}(2)) 
1.28 (0.526) 
0.24 (0.889) 
6.44^{**} (0.040) 
Heteroscedasticity (χ^{2}(1)) 
0.28 (0.594) 
2.24 (0.134) 
1.35 (0.245) 
Note: Value in parenthesis after estimated coefficient is standard error, value in parenthesis after chisquare diagnostic statistic is marginal significance level; ** indicates significant at 5%,* indicates significant at 10%. 
(1)  (2)  (3)  (4)  

Liquidity constraint defined as income growth  Liquidity constraint defined as money/GDP ratio  Liquidity constraint defined as the deposit rate  Liquidity constraint defined as income growth  
Constant  2.57^{**} (0.71) 
0.72 (0.89) 
−0.20 (1.02) 
2.15^{**} (0.75) 
Log income (t1) 
0.19^{**} (0.06) 
−0.04 (0.08) 
−0.08 (0.08) 
0.18^{**} (0.06) 
Log consumption (t1) 
−0.56^{**} (0.16) 
−0.05 (0.20) 
0.13 (0.23) 
−0.46^{**} (0.17) 
Real interest rate (t) 
0.34^{**} (0.08) 
0.30^{**} (0.12) 
0.38^{**} (0.13) 
0.35^{**} (0.09) 
Liquidity constraint (t) 
0.56^{**} (0.09) 
0.16^{**} (0.07) 

Liquidity constraint (t1) 
−0.74^{**} (0.32) 

Liquidity constraint (t)(70s) 
0.60^{**} (0.17) 

Liquidity constraint (t)(80s) 
0.46^{**} (0.10) 

Rbarsquared  0.723  0.465  0.388  0.716 
Standard error  0.0140  0.0199  0.0204  0.0144 
Misspecification  χ^{2}(5)=4.46 (0.486) 
–  –  χ^{2}(10)=9.94 (0.446) 
Serial correlation (χ^{2}(1)) 
0.42 (0.518) 
1.01 (0.314) 
1.45 (0.228) 
0.31 (0.579) 
Functional form (χ^{2}(1)) 
2.43 (0.119) 
0.36 (0.549) 
0.36 (0.547) 
0.12 (0.725) 
Normality (χ^{2}(2)) 
0.87 (0.646) 
0.30 (0.860) 
0.45 (0.798) 
15.87^{**} (0.000) 
Heteroscedasticity (χ^{2}(1)) 
0.95 (0.329) 
2.45 (0.115) 
2.17 (0.140) 
2.09 (0.491) 
Note: Value in parenthesis after estimated coefficient is standard error, value in parenthesis after chisquare diagnostic statistic is marginal significance level; ** indicates significant at 5%,* indicates significant at 10%. 
(1)  (2)  (3)  (4)  

Constraint defined as current income growth  Constraint defined as money/GDP ratio  Constraint defined as loan rate  Constraint defined as current income growth  
Constant  1.99^{**} (0.51) 
1.77^{**} (0.58) 
1.42^{**} (0.43) 
1.58^{**} (0.45) 
Log income (t1) 
0.27^{**} (0.06) 
0.22^{**} (0.07) 
0.19^{**} (0.08) 
0.28^{**} (0.06) 
Log consumption (t1) 
−0.49^{**} (0.11) 
−0.43^{**} (0.13) 
−0.34^{**} (0.12) 
−0.46^{**} (0.11) 
Δdependency ratio (t) 
5.21^{**} (1.45) 
1.87 (1.42) 
4.70^{**} (1.57) 

Loandeposit rates (t) 
−1.34^{**} (0.55) 
−0.78^{*} (0.38) 

Liquidity constraint (t) 
0.34^{**} (0.08) 
0.06^{**} (0.03) 
−0.80^{**} (0.31) 

Liquidity constraint (t)(60s) 
0.38^{**} (0.14) 

Liquidity constraint (t)(70s) 
0.36^{**} (0.06) 

Liquidity constraint (t)(80s) 
0.15 (0.10) 

Rbarsquared  0.625  0.350  0.390  0.652 
Standard error  0.0145  0.0191  0.0185  0.0140 
Misspecification  χ^{2}(8)=6.46 (0.596) 
χ^{2}(9)=8.09 (0.525) 
χ^{2}(11)=17.20 (0.102) 
χ^{2}(22)=16.22 (0.805) 
Serial correlation (χ^{2}(1)) 
1.33 (0.249) 
0.00 (0.970) 
0.67 (0.411) 
1.56 (0.212) 
Functional form (χ^{2}(1)) 
0.32 (0.572) 
0.44 (0.508) 
2.63 (0.105) 
0.39 (0.533) 
Normality (χ^{2}(2)) 
0.00 (1.000) 
1.02 (0.599) 
1.79 (0.409) 
0.48 (0.785) 
Heteroscedasticity (χ^{2}(1)) 
0.54 (0.462) 
0.26 (0.609) 
0.00 (0.980) 
0.59 (0.320) 
Note: Value in parenthesis after estimated coefficient is standard error, value in parenthesis after chisquare diagnostic statistic is marginal significance level; ** indicates significant at 5%,* indicates significant at 10%. 
(1)  (2)  (3)  (4)  (5)  

Liquidity constraint defined as current income growth  Liquidity constraint defined as money/GDP ratio  Liquidity constraint defined as loan rate  Liquidity constraint defined as loandeposit rate  Liquidity constraint defined as current income growth  
Constant  1.94^{**} (0.41) 
0.38 (0.68) 
1.17^{**} (0.52) 
0.09^{**} (0.03) 
1.99^{**} (0.41) 
Log income (t1) 
0.50^{**} (0.09) 
0.41^{**} (0.12) 
0.37^{**} (0.12) 
0.51^{**} (0.09) 

Log consumption (t1) 
−0.77^{**} (0.14) 
−0.52^{**} (0.19) 
−0.52^{**} (0.19) 
−0.78^{**} (0.14) 

Δage ratio (t) 
14.92^{**} (6.66) 
16.00^{*} (8.18) 

Real interest rate (t) 
0.15^{**} (0.06) 
0.31^{**} (0.11) 
0.16^{*} (0.09) 
0.15^{**} (0.05) 

Liquidity constraint (t) 
0.32^{**} (0.06) 
2.13^{**} (0.029) 
−0.62^{**} (0.26) 
−0.71^{**} (0.34) 

Liquidity constraint (t)(70s) 
0.30^{**} (0.12) 

Liquidity constraint (t)(80s) 
0.30^{**} (0.07) 

Rbarsquared  0.800  0.581  0.588  0.261  0.786 
Standard error  0.0093  0.0136  0.0134  0.0180  0.0097 
Misspecification  χ^{2}(7)=7.94 (0.338) 
χ^{2}(7)=8.19 (0.316) 
χ^{2}(7)=11.3 (0.126) 
χ^{2}(6)=9.03 (0.172) 
χ^{2}(10)=12 (0.259) 
Serial correlation (χ^{2}(1)) 
2.29 (0.130) 
0.02 (0.899) 
0.00 (0.957) 
1.21 (0.272) 
2.59 (0.107) 
Functional form (χ^{2}(1)) 
0.44 (0.507) 
0.44 (0.505) 
2.02 (0.155) 
0.56 (0.454) 
0.06 (0.811) 
Normality (χ^{2}(2)) 
0.67 (0.716) 
1.47 (0.479) 
1.05 (0.593) 
0.85 (0.654) 
0.74 (0.691) 
Heteroscedasticity (χ^{2}(1)) 
0.01 (0.927) 
1.05 (0.306) 
0.44 (0.507) 
0.42 (0.517) 
0.04 (0.834) 
Note: Value in parenthesis after estimated coefficient is standard error, value in parenthesis after chisquare diagnostic statistic is marginal significance level; ** indicates significant at 5%,* indicates significant at 10%. 