We study the relative risk aversion of an individual with particular social preferences: his wellbeing is influenced by his relative wealth, and by how concerned he is about having low relative wealth. Holding constant the individual's absolute wealth, we obtain two results. First, if the...

Assuming that an individual's rank in the wealth distribution is the only factor determining the individual's wellbeing, we analyze the individual's risk preferences in relation to gaining or losing rank, rather than the individual’s risk preferences towards gaining or losing absolute wealth....

I study attitudes towards risk taking in cases where a person relates to others positively, namely altruistically. This study is needed because it is unclear how altruism influences the inclination of an altruistic person to take risks. Will this person's risk-taking behavior differ if the...

We explore asset holding diversification by Australian households, in particular, the household asset diversification participation decision (whether or not to diversify at all) is jointly estimated with the decision of how much to diversify. In so doing, recent literature on the modelling of...

Using data from the US Health and Retirement Study, we study the causal effect of increased health insurance coverage through Medicare and the associated reduction in health-related background risk on financial risk-taking. Given the onset of Medicare at age 65, we identify our effect of...

We study how unemployment effects the over-indebtedness of households using the new European Household Finance and Consumption Survey (HFCS). First, we assess the role of different labor market statuses (i.e. employed, unemployed, disabled, retired, etc.) and other household characteristics...

Using a nationally representative panel of consumer credit records for the US from 1999 to 2021, we document a positive correlation between child and parent homeownership. We propose a new causal mechanism behind this relationship based on parents extracting home equity to help finance their...

In a nationally-representative sample, we predict retirement savings using survey-based elicitations of exponential-growth bias (EGB) and present bias (PB). We find that EGB, the tendency to neglect compounding, and PB, the tendency to value the present over the future, are highly significant...

The COVID-19 pandemic has resulted in income and employment loss in many countries around the world. Yet, hardly any formal study exists on household finance and future economic expectations in poorer countries. To fill in this gap, we implemented and analyzed a web-based rapid assessment survey...

We investigate whether older people correctly perceive their own cognitive decline, and the potential financial consequences of misperception. First, we document the fact that older people tend to underestimate their cognitive decline. We then show that those who experienced a severe cognitive...