This paper describes the transmission of income inequality into consumption inequality and in so doing investigates the … degree of insurance to income shocks. It combines panel data on income from the PSID with consumption data from repeated CEX … cross-sections and distinguishes between permanent and transitory income shocks. We find some partial insurance of permanent …

This paper uses panel data on household consumption and income to evaluate the degree of insurance to income shocks …. Our aim is to describe the transmission of income inequality into consumption inequality. Our framework nests the special … cases of self-insurance and the complete markets assumption. We assess the degree of insurance over and above self-insurance …

stratified by education. Our estimates strongly reject the consumption insurance model and suggest that households smooth income …

stratified by education. Our estimates strongly reject the consumption insurance model and suggest that households smooth income …

model, and the consumption insurance model) by means of mobility indexes for the underlying consumption distribution. Each … and compare them with the actual mobility. The comparison rejects the theory of consumption insurance and the myopic model …

stratified by education. Our estimates strongly reject the consumption insurance model and suggest that households smooth income …

This Paper uses panel data on household consumption and income to evaluate the degree of insurance to income shocks …. Our aim is to describe the transmission of income inequality into consumption inequality. Our framework nests the special … cases of self-insurance and the complete markets assumption. We assess the degree of insurance over and above self-insurance …

use of a more accurate approximation allowing for partial sef-insurance against permanent shocks. We show that the use of … data on median asset holdings corrects much of the error in the simple approximation which assumes no self-insurance …

The theory of full consumption insurance posits that households are insulated from all idiosyncratic shocks so that the … ratio of the marginal utilities of consumption of any two households is constant over time. Consumption insurance therefore … measurement error in consumption. The findings strongly reject the theory of full consumption insurance. …

The theory of full consumption insurance posits that households are insulated from all idiosyncratic shocks so that the … ratio of the marginal utilities of consumption of any two households is constant over time. Consumption insurance therefore … measurement error in consumption. The findings strongly reject the theory of full consumption insurance. …