This paper explores theoretically and empirically the issue of time-varying relative risk aversion (TVRRA). We analytically solve a parsimonious life-cycle portfolio choice model with the preferences given by Greenwood, Hercowitz and Huffman (1988, GHH). Our analytical solution identifies four...

This paper explores theoretical implications and empirical evidence of GHH preferences [Greenwood et al. (1988)] over portfolio choices. First, we analytically solve a parsimonious life-cycle portfolio choice model with the GHH preferences and endogenous labor-leisure choice. Second, our...

We test whether relative risk aversion varies with wealth using the Panel Study of Income Dynamics data in the U.S. Our analytical results indicate the following implications. For each household, there are two channels through which the risky share responds to wealth fluctuations, the income...

Rapid urbanization and global climate change have led to urban flooding and water shortages all over the world. To deal with the urban flooding and water quality issues, China has introduced an initiative of sponge city nationally to optimize urban water ecosystem. Based on Theory of Planned...