Both textbook economics and common sense teach us that the value of household wealth should be related to consumer … suggest. An important first step in understanding the consumption-wealth linkage is determining how closely the two variables … in consumption. This paper provides evidence that a surprisingly small fraction of the variation in household net worth …

rises in wealth in the cross-section of households in the Survey of Consumer Finances. For a given household, the portfolio … share can fall in response to an increase in wealth, even though the model implies decreasing relative risk aversion …

Both textbook economics and common sense teach us that the value of household wealth should be related to consumer … suggest. An important first step in understanding the consumption-wealth linkage is determining how closely the two variables … in consumption. This paper provides evidence that a surprisingly small fraction of the variation in household net worth …