Households face earnings risk which is non-normal and varies by age and over the income distribution. We show that … assets. Because households are subject to more background risk than previously considered, the estimated model implies a … substantially lower coefficient of risk aversion. We also find renewed support for rule-of-thumb investment strategies under the …

that low-risk stocks outperform high-risk stocks. Using a large-scale household dataset, we provide an explanation for this …Contrary to the theoretical principle that higher risk is compensated with higher expected return, the literature shows … puzzling result that the anomalous negative risk-return relation is only confined to those stocks held by rich households …

risk. Economic theory suggests that when background risk rises, individuals will reduce their exposure to other risks. This … paper presents a test of this theory by examining the effect of medical expenditure risk on the willingness of elderly … Medicare beneficiaries to hold risky assets. We measure exposure to medical expenditure risk by whether an individual is …