type="main" xml:id="ecor12095-abs-0001" <p>Tests using Household, Income and Labour Dynamics in Australia unit record data from 2006–07 to 2010–11 indicate that Australian households on average insure against idiosyncratic income shocks. For a 10 per cent change in income, non-durable...</p>

Selling (buying) a country’s equity index in exchange for equity investments elsewhere during a stock market crash (boom) is analogous to exercising an option to exchange an underperforming country (global benchmark) index for a global benchmark (country) index. This can be shown by extending...