This study investigates financial risk aversion using an improved measure based on income gambles and rigorously related to optimal portfolio choices. The new measure modifies a previous measure by adding graphical presentations to clarify the impact of different income choices. We compared the...

To estimate the monetary value of ideal financial planning advice, we address three types of benefits that planners provide: increasing wealth, preventing loss, and smoothing consumption. We discuss, then reject the possibility of using survey data to obtain valid estimates of the benefit of...

About 20% of U.S. households are credit constrained. This research analyzes credit constraints among those who have applied for credit and controls for the effects of past credit behavior on being credit constrained. It is the first to identify the impact on being credit constrained of being...

Based on 1998 to 2007 Survey of Consumer Finances datasets the proportion of households reporting use of a financial planner increased from 21% in 1998 to 25% in 2007, with an estimated increase of almost five million households between 2004 and 2007. Multivariate analysis shows that the...

Normative analyses of household financial decisions typically assume parameters of the household utility function. Some general issues on parameter assumptions for normative analysis are discussed in this study. We review selected normative household analyses appearing in finance and economics...

Life cycle theory is applied to determine which households are more likely to have negative net worth. Negative net worth household characteristics are examined using data from the 1992, 1995, 1998, 2001, 2004, and 2007 Survey of Consumer Finances. Logit Analysis showed households in survey...