Abstract
Much research in consumption has focused its attention on the importance of precautionary saving in the accumulation of aggregate wealth. From these studies, it has been shown that approximately half of the aggregate wealth accumulated in the United States can be attributed to income uncertainty if the representative household possesses a precautionary demand for saving. Using time-series data, this paper develops a test to determine whether or not precautionary motives are in fact significant at the aggregate. The test yields substantial evidence identifying both an aggregate existence of precautionary saving and an important role for such saving in the accumulation of aggregate wealth.