changes in wealth. In the cross section, we find that wealthier investors are more risk averse. Using changes in house prices … as a source of variation, we find that investors become more risk averse after a negative wealth shock. These preferences …

We use data from the PSID to investigate how households' portfolio allocations change in response to wealth … consequence that when the level of liquid wealth changes, the proportion a household invests in risky assets should also change in … is not affected by wealth changes. Instead, one of the major drivers of households' portfolio allocation seems to be …

changes in wealth. In the cross section, we find that wealthier investors are more risk averse. Using changes in house prices … as a source of variation, we find that investors become more risk averse after a negative wealth shock. These preferences …