consumption in any present or future state of nature (good or bad). As a result the degree of loss aversion does not directly … present value of its endowment income, then the household cannot avoid experiencing a relative loss in consumption, either now … or in the future. As a result, loss aversion directly affects consumption and risky investment. Reference levels play a …

reference level and the degree of loss aversion. Among others we find that the household increases its exposure to risky assets …

uncertainty about future income triggers saving because of loss aversion. We extend their theoretical analysis to also consider … 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 …

triggers an increase in saving because of loss aversion. Guided by the theoretical model of Koszegi and Rabin (2009), we first … extend their theoretical analysis to also consider the internal margin, i.e., the strength, of loss aversion, and then … empirically study the relation between income risk, experimentally elicited loss aversion, and precautionary savings. We do so …