Previous writers have attempted to resolve the equity premium puzzle by employing a utility function that depends on current consumption minus (or relative to) past habit consumption. This paper points out that an individual's current utility may also depend upon how well off in the recent past he or she had expected to be today. Hence we add the concept “expectation formation” to the utility modification term in a model with a habit‐formation utility function. We apply the model to the equity premium puzzle and find that it is able to fit the data with a relatively low coefficient of relative risk aversion. Furthermore, we introduce an updated data sample and apply different values of discounting factors, and find that in all circumstances, the model is able to generate coefficients of risk aversion that are consistent with theory. Hence we conclude that the model is able to resolve the equity premium puzzle.

中文翻译：

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有习惯和期望的生活：股票溢价之谜的新解释

以前的作者曾试图通过使用效用函数来解决股权溢价难题，该效用函数取决于当前消费减去（或相对于）过去习惯消费。本文指出，一个人当前的效用还可能取决于他或她最近所期望的今天的状况。因此，在具有习惯形成效用函数的模型中，我们将“期望形成”概念添加到效用修改项中。我们将该模型应用于股票溢价之谜，发现该模型能够以相对较低的相对风险厌恶系数拟合数据。此外，我们引入了一个更新的数据样本并应用了不同的折现因子值，发现在所有情况下，该模型都能够生成与理论相符的风险规避系数。