“Noon Sunshine-Young Scholars Seminar” is a regular academic exchange platform held by School of Finance. It aims to offer valuable occasions of communications among scholars in our college, between teachers and students, the domestic and the oversea. In this semester, we keep our original intention, set off for a new voyage. We will devote ourselves to fostering the academic atmosphere in the college, and promoting the academic level for both teachers and students.

The fourth session of “Noon Sunshine-Young Scholars Seminar” for the Spring Semester in 2024 is arranged as follows:

Lecture topic：Is Mismeasurement of Real Consumption Due to Product Turnover Relevant for Asset Prices?

Keynote Speaker: Zhang Xiaolin

Commentator: Xie Xiaochen

Date：Thursday, March 28th, 2024

Time：12:00-13:00

Lecture Venue：Room 116, School of Finance

Abstract

Empirical research finds little support for the standard consumption-based asset pricing model (CCAPM). Product turnover as a result of creative destruction embodies quality upgrading by Schumpeter (1942)’s argument, making it relevant for measuring real consumption. Adopting a recent approach to measuring the cost ofliving which accounts for changes in product variety in the consumer market, I test whether the poor performance of CCAPM comes from the fact that real consumption is mismeasured using the current fixed- basket price index. Per-capita real consumption growth is faster and more negatively skewed after adjusting for product turnover, while the volatility of consumption growth remains largely unchanged. Moreover, the adjustment does not improve the ability of consumption risk to explain the cross-section of equity returns.