-markets consumption allocation. There is substantial heterogeneity in risk preferences estimated from the full-insurance model, positively …We measure heterogeneity in risk aversion among households in Thai villages using a full risk-sharing model and … correlated in most villages with portfolio-choice estimates. The heterogeneity matters for policy: Although the average household …

Can measured risk attitudes and associated structural models predict insurance demand? In an experiment (n = 1,730), we … various risk-attitude measures. Yet all the structural models predict insurance poorly, often less accurately than random … parameterize seventeen common structural models (e.g., expected utility, cumulative prospect theory). Subjects also make twelve …

I characterize a dynamic economy under general distributions of households' risk tolerance, endowments, and beliefs … consumption-share increases; (b) the wealth-share of high risk-tolerant households increases; (c) richer households' wealth … risk sharing. Higher uncertainty increases stock prices, risk premiums, volatility, wealth inequality and the dispersion of …

This paper re-examines the classic question of how a household should optimally allocate its portfolio between risky … stocks and risk-free bonds over its lifecycle. We show that allowing for the wage indexation of social security benefits …

options in defined contribution retirement plans. We document large differences in realized TDF returns and risk profiles …, even for funds with the same target retirement date. Using fund-level data, we find evidence that this heterogeneity … reflects optimal risk-taking by fund families with low market share, especially those entering the market after 2006. Using …

aggregate risk. We propose a theory to explain these risk exposures. We study a financial accelerator model where entrepreneurs … negative shocks, we show that they tend not to do so. This is because it is costly to buy insurance against these shocks as … inefficiently high risk exposure for entrepreneurs …

small part of the welfare costs of labor income risk over the life cycle …

wealth and household size, and to a lesser extent with education and proxies for financial experience. The index is strongly … positively correlated with the share of risky assets held by a household …

least insured. We document this risk-insurance pattern in data on life-insurance drawn from the Survey of Consumer Finance …We develop a macroeconomic model with physical and human capital, human capital risk, and limited contract enforcement …. We show analytically that young (high-return) households are the most exposed to human capital risk and are also the …

Heterogeneously risk-averse individuals who lack access to formal insurance build and use relationships with each other … to manage risk. I study the formation of these relationships. I show that the composition of equilibrium groups under … reduction in aggregate risk may lead to an increase in risk borne by the most risk-averse individuals, as the least risk …