We study the effect on savings of an increase in the capital risk of the investment opportunities when the … individuals with high risk-aversion and time-separable, power utility increase their optimal savings when capital risk increases …

(2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states … systems as those established in the EU are able to offset the negative impact of unemployment risk on the portfolio … persistence. -- Precautionary savings ; unemployment insurance ; long-term unemployment ; income uncertainty …

Households can rely on private savings or on public unemployment insurance to hedge against the risk of becoming … risk on households’ equity holdings. When incorporating long-term unemployment, the US-equity share drops. This negative … significantly alter portfolio decisions. We show that different responses of portfolios to unemployment risk can be attributed to …

(2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states … systems as those established in the EU are able to offset the negative impact of unemployment risk on the portfolio …

labor, and a representation of preferences that disentangles attitudes towards risk, attitudes towards intertemporal …

(2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states … systems as those established in the EU are able to offset the negative impact of unemployment risk on the portfolio …

In this paper household level data are used to explore whether unemployment risk is an important factor in the timing … cycle. The model predicts that consumers respond to increases in unemployment risk by postponing purchases of the durable …. Consistent with the model, there is evidence that unemployment risk has a direct effect on the timing of home purchases …

We study how risk aversion affects precautionary savings when considering monotone recursive Kreps-Porteus preferences …. In a general infinite-horizon setting, we prove that risk aversion unambiguously increases precautionary savings. The …

Our estimates indicate that 24% of net wealth is attributed to precautionary savings in Australia. Moreover, across the … related studies find that low-income households hold low levels of precautionary savings. Using a simple theoretical model, we …

Miao (2011) of the smooth ambiguity model of Klibanoff et al. (2005). These models put risk, ambiguity and time preferences … together in a Kreps-Porteus aggregator, and disentangle the effects among risk, ambiguity and time preferences. We show that … sufficient conditions such that risk, ambiguity and time preferences together always raise the demand for saving and self-insurance …