Subprime mortgages represent a relevant wealth accumulation tool for low-income borrowers, and may promote efficient social policies. However, as recently brought to attention by the financial crisis, origination and distribution services are affected by strong information asymmetries and...

Using longitudinal data from PSID, we show the positive relation between labor income and the equity share of financial wealth is stronger for those who have a higher persistence in shocks to permanent labor income. The results support the hypothesis that the cross sectional variation in...

Using a homogeneous and continuous utility function that represents a household's preferences, this paper proves explicit identities between most of the different objects that arise from the utility maximization and the expenditure minimization problems. The paper also outlines the homogeneity...

Behavioral economics is influencing regulatory initiatives in many nations, including the United States and the United Kingdom. The role of behavioral economics is likely to increase in the next generation, especially in light of the growing interest in low-cost, choice-preserving regulatory...

Impersonal default rules, chosen by private or public institutions, establish settings and starting points for countless goods and activities -- cell phones, rental car agreements, computers, savings plans, health insurance, websites, privacy, and much more. Some of these rules do a great deal...

Libertarian paternalism, as advanced by Cass Sunstein, is seriously flawed, but not primarily for the reasons that most commentators suggest. Libertarian paternalism and its attendant regulatory implications are too libertarian, not too paternalistic, and as a result are in considerable tension...

In diverse areas – from retirement savings, to fuel economy, to prescription drugs, to consumer credit, to food and beverage consumption – government makes personal decisions for us or helps us make what it sees as better decisions. In other words, government serves as our agent. Understood...

In the modern regulatory state, there is a serious tension between two indispensable ideas. The first is that it is important to measure, both in advance and on a continuing basis, the effects of regulation on social welfare, usually through cost-benefit analysis. The second idea, attributable...

Should there be a right not to be manipulated? What kind of right? On Kantian grounds, manipulation, lies, and paternalistic coercion are moral wrongs, and for similar reasons; they deprive people of agency, insult their dignity, and fail to respect personal autonomy. On welfarist grounds,...

We provide a method to measure welfare, in money-metric terms, taking into account expectations about the future. Our two key assumptions are that (1) the expenditure function is separable between the present and the future, and (2) there are some households that do not face idiosyncratic...