Over much of the past 25 years, the cycles of house price and consumption growth have been closely synchronised. Three main hypotheses for this co-movement have been proposed in the literature. First, that an increase in house prices raises households' wealth, particularly for those in a...

Faced with ageing populations, OECD governments are seeking policies to increase individual retirement saving. In April 2001, the UK government introduced Stakeholder Pensions – a low cost retirement saving vehicle. The reform also changed the structure of tax-relieved contribution ceilings,...

This paper focuses on the issue of limited financial market participation and determines a lower bound on the level of fixed transaction costs that are required to reconcile observed portfolio choices with asset returns within an isoelastic utility framework. The bound is determined from the set...

This paper shows that a power utility specification of preferences over total expenditure (ie. CRRA preferences) implies that intratemporal demands are in the PIGL/PIGLOG class. This class generates (at most) rank two demand systems and we can test the validity of power utility on cross-section...

We examine the impact of housing wealth on labor supply decisions using data on exogenous local variation in house prices merged into household panel data for Britain. Our estimates are conditioned on variations in local labor demand and income expectations as these may co-determine housing...

Much of the focus of the UK pensions policy debate over the past decade has been on the adequacy (or otherwise) of private retirement saving. In this paper, we present the first assessment of the optimality of the retirement resources of English couple households born in the 1940s. Here,...

Using a model where households can save in either a safe asset or in an illiquid, tax-advantaged pension, we assess the extent to which those who recently reached the state pension age in the UK have saved optimally for retirement. The policy environment specified closely matches that prevailing...

This paper suggests a method for estimating the distribution of discount rates using panel data on income and wealth. Using the English Longitudinal Survey of Ageing (ELSA), a representative sample of the English popularion over age 50, we general panel date on total consumption from the...

The aim of this paper is to understand what a recession means for individual consumers, and to model in a life-cycle framework how individuals respond to recessions. Our focus is on the sharp increase in savings rates that have been observed in the current and recent recessions. We show...

The paper examines how individuals respond to complex decision-making environments - in particular, whether up-front financial incentives are an effective policy lever to change behaviour. The paper argues that incentives differ in their transparency and in their complexity; individuals are more...