This paper investigates the degree of risk sharing across households in China with heterogeneous risk and time … the true risk sharing degree if, in reality, preferences correlate with variations of household income. We use household …, which ignores this correlation, shows about 30% of household income shocks pass through to household consumption. However …

risk averse anymore even if utility from divisible consumption is concave. I propose a definition of insurance in the … such state-dependent indivisible consumption opportunities influences a person’s risk attitudes. In general, people are not … that bases insurance demand on risk aversion with important implications for policy and research. …

. While consumption significantly responds to transitory income shocks, out-of-pocket medical expenses do not. In contrast …, both consumption and out-of-pocket medical expenses respond to transitory health shocks. Thus, most U.S. elderly keep their … out-of-pocket medical expenses close to a satiation point that varies with health. Consumption responds to health shocks …