theoretical predictions, we find that an increase in income risk is associated with higher savings for loss-averse individuals … the internal margin, i.e., the strength, of loss aversion, and empirically study the relation between income risk …, experimentally elicited loss aversion and precautionary savings. We do so using a sample of 640 individuals from the low-income …

empirically study the relation between income risk, experimentally elicited loss aversion, and precautionary savings. We do so … subject to substantial income risk. In line with the theoretical predictions, we find that an increase in income risk is … aversion. An accompanying laboratory experiment confirms that an exogenous increase in income risk causally leads to this …

Using detailed micro-data, this paper documents that households with lower income risk (and higher income levels … designed to account for the empirically observed negative correlation between income levels and income risk. This interaction … labor income risk. Otherwise, the effects of income risk are masked by wealth effects. In neither case, the MPC depends on …

theoretical predictions, we find that an increase in income risk is associated with higher savings for loss-averse individuals … the internal margin, i.e., the strength, of loss aversion, and empirically study the relation between income risk …, experimentally elicited loss aversion and precautionary savings. We do so using a sample of 640 individuals from the low-income …

significant effects of precautionary savings on the consumption-savings decision. As a result of a doubling of transitory income …. -- Consumption-savings decision ; interest rate elasticity of savings ; income uncertainty …This paper empirically investigates the effects of changes in the interest rate as well as transitory income …

theory of precautionary savings and to quantify the importance of self-selection into occupations due to differences in risk … aversion. In the presence of self-selection, failing to control for risk aversion in empirical tests of precautionary savings … results in a bias that could lead to a false rejection of the theory. We exploit the fact that for individuals from the former …

significant effects of precautionary savings on the consumption-savings decision. As a result of a doubling of transitory income …This paper empirically investigates the effects of changes in the interest rate as well as transitory income … uncertainty on households' consumption-savings decision. Applying a structural demand model to German survey data, we estimate the …

alternative measures of income uncertainty in a cross-section of households. In addition to the usual controls, risk aversion is …The saving ratio of households in Germany has increased in the past few years when the income trend was weak. This … could be due to precautionary saving. In this paper, the importance of precautionary saving against income uncertainty is …

We investigate whether US households possess advance information about their future income and what this means for … requires only panel data on consumption and income. Using the Panel Study of Income Dynamics, we find-in contrast to the … incomplete markets model and find that advance information reduces households' income forecast errors by 15%. Our estimation …