Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at

This paper examines a new possible explanation for the recent rejections of the life cycle-permanent income model of consumption: the treatment of seasonal fluctuations. The paper shows that when the seasonal fluctuations in consumption purchases are included in an analysis of the life cycle-permanent income model, there is no evidence in the aggregate data against the model. The estimates of the parameters of agents' utility functions obtained with seasonally unadjusted data are plausible, and the unadjusted data do not reject the overidentifying restrictions on the model.