Priceless Consumption

60 Pages Posted: 11 Nov 2019 Last revised: 5 May 2020

See all articles by Frederico Belo

Frederico Belo

INSEAD; Centre for Economic Policy Research (CEPR)

Andres Donangelo

Date Written: May 4, 2020


Priceless consumption (PC) is a type of consumption that is not available in the marketplace and, therefore, is absent from aggregate consumption measures. We propose an estimation methodology to recover PC from its effects on the composition of observable consumption. The estimation shows that PC is economically significant: It is highly volatile and has become increasingly scarce and valuable over the past decades. As an application, we show that using the recovered true aggregate consumption series, which includes PC, significantly improves the fit of the standard consumption-CAPM with power-utility.

Keywords: Consumption, NIPA, Demand System Estimation, Translog, Asset Pricing, C-CAPM

JEL Classification: E01, E21, G12, D12

Suggested Citation

Belo, Frederico and Donangelo, Andres, Priceless Consumption (May 4, 2020). Available at SSRN: or

Frederico Belo

INSEAD ( email )

Boulevard de Constance
77305 Fontainebleau Cedex

Centre for Economic Policy Research (CEPR) ( email )

United Kingdom

No contact information is available for Andres Donangelo

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