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Fitting parsimonious household- portfolio models to data
Hubar, Sylwia; Koulovatianos, Christos; Li, Jian - Center for Financial Studies - 2014
shares increase in household income and wealth. Yet, there is a multitude of numbers to match through models. Using a single …, creating endogenous risk-aversion differences across rich and poor. A closed-form solution for the model with insurable labor …-income risk serves as calibration guide for numerical simulations with uninsurable labor-income risk. …
Persistent link: https://www.econbiz.de/10010986432
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Saving rates and portfolio choice with subsistence consumption
Achury, Carolina; Hubar, Sylwia; Koulovatianos, Christos - Center for Financial Studies - 2011
We analytically show that a common across rich/poor individuals Stone-Geary utility function with subsistence consumption in the context of a simple two-asset portfolio-choice model is capable of qualitatively and quantitatively explaining: (i) the higher saving rates of the rich, (ii) the...
Persistent link: https://www.econbiz.de/10010958742
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Household economic decisions under the shadow of terrorism
Christelis, Dimitris; Georgarakos, Dimitris - Center for Financial Studies - 2009
We investigate, using the 2002 US Health and Retirement Study, the factors influencing individuals' insecurity and expectations about terrorism, and study the effects these last have on households' portfolio choices and spending patterns. We find that females, the religiously devout, those...
Persistent link: https://www.econbiz.de/10010958603
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Money in motion: Dynamic portfolio choice in retirement
Horneff, Wolfram J.; Maurer, Raimond H.; Mitchell, Olivia S. - Center for Financial Studies - 2007
equity premium and longevity insurance in her retirement portfolio. Even without bequests, she will not fully annuitize …. Welfare gains from this strategy can amount to 40 percent of financial wealth (depending on risk parameters and other …
Persistent link: https://www.econbiz.de/10010958527
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Precautionary saving and the marginal propensity to consume out of permanent income
Carroll, Christopher D. - Center for Financial Studies - 2009
The budget constraint requires that, eventually, consumption must adjust fully to any permanent shock to income. Intuition suggests that, knowing this, optimizing agents will fully adjust their spending immediately upon experiencing a permanent shock. However, this paper shows that if consumers...
Persistent link: https://www.econbiz.de/10010958808
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Risk aversion under preference uncertainty
Kräussl, Roman; Lucas, André; Siegmann, Arjen - Center for Financial Studies - 2010
We show that if an agent is uncertain about the precise form of his utility function, his actual relative risk aversion … may depend on wealth even if he knows his utility function lies in the class of constant relative risk aversion (CRRA … their risk aversion parameter invest less in risky assets than wealthy investors with identical risk aversion uncertainty. …
Persistent link: https://www.econbiz.de/10010986389
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Increasing the effectiveness of financial education in the workplace
Lusardi, Annamaria - Center for Financial Studies - 2008
Persistent link: https://www.econbiz.de/10010958620
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Financial literacy: An essential tool for informed consumer choice?
Lusardi, Annamaria - Center for Financial Studies - 2008
Increasingly, individuals are in charge of their own financial security and are confronted with ever more complex financial instruments. However, there is evidence that many individuals are not well-equipped to make sound saving decisions. This paper demonstrates widespread financial illiteracy...
Persistent link: https://www.econbiz.de/10010958707
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Debt literacy, financial experiences, and overindebtedness
Lusardi, Annamaria; Tufano, Peter - Center for Financial Studies - 2009
We analyze a national sample of Americans with respect to their debt literacy, financial experiences, and their judgments about the extent of their indebtedness. Debt literacy is measured by questions testing knowledge of fundamental concepts related to debt and by selfassessed financial...
Persistent link: https://www.econbiz.de/10010958712
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Confronting the Robinson Crusoe paradigm with household-size heterogeneity
Koulovatianos, Christos; Schröder, Carsten; Schmidt, Ulrich - Center for Financial Studies - 2008
way a single representative household would behave. This analytical approach requires that incentives of the poor and the … available at the household level, and individuals living in multimember households have the potential to share goods within the … household. The analytical approach of modern macroeconomics would require that intra-household sharing is also strictly aligned …
Persistent link: https://www.econbiz.de/10010986469