Both textbook economics and common sense teach us that the value of household wealth should be related to consumer … in consumption. This paper provides evidence that a surprisingly small fraction of the variation in household net worth …

Households' insurance against shocks to income and asset values (that is, household risk management) is limited … explains this basic insurance pattern. In a model with limited enforcement, we show that household risk management is … increasing in household net worth and income, incomplete, and precautionary. These results hold in economies with income risk …

-migration, congestion of other local publicly provided goods may offset the direct benefits. Using the example of rural household …