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 …

disastrous income risk. We first empirically explore the relations among consumption changes, aggregate income, disaster shock … income risk to which the agent is exposed and her income recovery post disaster jointly affect the agent's optimal decisions …In this paper, we develop an analytically tractable dynamic model of optimal consumption and savings decisions with …

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 …