or long-term unemployment, may occur during working years. Personal disaster risk alters lifetime ex-ante investment …This paper examines households' self-insurance in financial markets when a rare personal disaster, such as disability … choices, even if most workers will not experience a disaster. Uncertainty about the size of human capital losses, which …

To effectively cope with an unexpected, large, and negative income shock, I propose a life-cycle model for income risk … generalizing the Arrow-Debreu price with income risk premium …

potentially large permanent shock to earnings. Personal disaster risk allows to match moderate risk-taking of young investors and … personal disaster, such as long-term unemployment or disability, during working years. Such a disaster entails an uncertain but … a flat investment profile in age, observed in the United States, when the calibration of both the disaster probability …

labor-income risk can explain much of this risk-taking pattern. Uncontrollable labor-income risk stresses middle …, middle-income households reduce (controllable) financial risk. Richer households, having less pressure, can afford more risk …-taking. The poor take low risk because they avoid jeopardizing their subsistence consumption. …

Formal dynamic analyses of household portfolio choice in the literature focus on holdings of equity and a risk … riskless short-term bond— and are exposed to uninsurable idiosyncratic risk through nonfinancial income as well as aggregate … risk through the asset returns. An application shows that the low Treasury returns observed in the US between 2009 and 2013 …

plans typically must fund spending from accumulated savings. This leads to the risk of depleting these savings, i ….e.portfolio depletion risk. We analyze the management of this risk through life cycle optimal dynamic asset allocation, including the … objective functions are tested and compared. We focus on the risk of portfolio depletion at the terminal date, using such …

We provide empirical evidence that visceral factors affect financial risk taking by showing that exposure to mass … shootings alters mutual fund managers' risk taking decisions. Funds that are exposed to mass shootings subsequently decrease … risk relative to their peers. The effect that we document is temporary, lasting approximately one quarter before reverting …