How does risk affect saving? Empirical work typically examines the effects of detectible differences in risk within the … data. How these differences affect saving in theoretical models depends on the metric one uses for risk. For labor …-income risk, second-degree increases in risk require prudence to induce increased saving demand. However, prudence is not …

: financial risk and environmental risk. The analysis is carried out using time series data for six advanced economies in the … period 1965-2007. The results support the theoretical conclusions that both financial risk alone and the interaction between … empirical analysis performed with one-argument utility functions. Finally, we provide new estimates of indexes of relative risk …

: financial risk and environmental risk. The analysis is carried out using time series data for six advanced economies in the … period 1965-2007. The results support the theoretical conclusions that both financial risk alone and the interaction between … empirical analysis performed with one-argument utility functions. Finally, we provide new estimates of indexes of relative risk …

uninsured capital income risk, and suffer from an information-processing capacity constraint. For given attention devoted to … capital income risk, we solve for the optimal consumption-saving choices and show that the expected welfare is increasing with … capacity, assuming a relative risk aversion degree larger than unity. Furthermore, we solve for attention choice and find that …

theoretical predictions, we find that an increase in income risk is associated with higher savings for loss-averse individuals … 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 …

Sandmo [1970] paper on general capital income risk to the case of risky capital taxation. In his framework the concept of a … mean preserving spread (MPS) is used for the risk analysis. In connection with risky taxes it is, however, possible to … explicitly connect the tax risk with the government's budget constraint. In this paper the concept of a budget balance preserving …

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 … associated with higher savings for loss-averse individuals, and that this increase in savings grows with the degree of loss …

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 … generates saving dynamics such that the stationary distribution of wealth among households facing different risk levels is not …

This paper examines the effects of income shock on savings decision of a household. In particular, it analyzes how an … differences in savings behavior between nuclear and joint families …