The buffer-stock model of precautionary saving has become a workhorse of modern-day consumer theory. Despite its …

The buffer-stock model of precautionary saving has become a workhorse of modern-day consumer theory. Despite its …

According to the permanent income hypothesis with quadratic preferences, savings should react only to transitory income … permanent shock to income, thus providing a powerful test of the theory. The empirical analysis is performed on a sample of …

expenditure. We find support for these predictions in three field experiments that randomly assign reminders to new savings …

, experimentally elicited loss aversion and precautionary savings. We do so using a sample of 640 individuals from the low … 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 aversion. Thus, as suggested by Koszegi and Rabin (2009 …

empirically study the relation between income risk, experimentally elicited loss aversion, and precautionary savings. We do so … associated with higher savings for loss-averse individuals, and that this increase in savings grows with the degree of loss …