) savings are strictly positive for at least 85 percent of subjects (iii) a majority of subjects uses time allocation to smooth …

intertemporal substitution. To study this, we set up a two-period model with wage uncertainty. This extends the standard savings …) savings are strictly positive for at least 85 percent of subjects (iii) a majority of subjects uses time allocation to smooth …

, experimentally elicited loss aversion and precautionary savings. We do so using a sample of 640 individuals from the low … theoretical predictions, we find that an increase in income risk is associated with higher savings for loss-averse individuals …, and that this increase in savings grows with the degree of loss aversion. Thus, as suggested by Koszegi and Rabin (2009 …

empirically study the relation between income risk, experimentally elicited loss aversion, and precautionary savings. We do so … associated with higher savings for loss-averse individuals, and that this increase in savings grows with the degree of loss …