Question: Consumption-based models of equity pricing, which include habits in consumption have been proposed by Abel (1990) and Campbell and Cochrane (1999). In your opinion, which

Consumption-based models of equity pricing, which include habits in consumption have been proposed by Abel (1990) and Campbell and Cochrane (1999). In your opinion, which of the two models provides the most convincing proposal and why? Engsted et al (2010) provide evidence comparing the standard CCAPM and the Campbell and Cochrane model. In the light of their estimates, what do you conclude about the ability of the Campbell and Cochrane model to improve on the properties of the standard CCAPM?

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