Wachter, Jessica A.; Yogo, Motohiro - In: Review of Financial Studies 23 (2010) 11, pp. 3929-3965
We develop a life-cycle consumption and portfolio choice model in which households have nonhomothetic utility over two types of goods, basic and luxury. We calibrate the model to match the cross-sectional and life-cycle variation in the basic expenditure share in the Consumer Expenditure Survey....
