Changes in risk and the demand for saving

• 成果类型: Article
• 署名作者: Eeckhoudt, Louis; Schlesinger, Harris
• 署名单位: University of Alabama System; University of Alabama Tuscaloosa; IESEG School of Management; University of Munich
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2008.08.004
• 发表日期: 2008
• 页码: 1329-1336
• 关键词: Precautionary saving; prudence; stochastic dominance; Temperance

摘要

How does risk affect saving? Empirical work typically examines the effects of detectible differences in risk within the data. How these differences affect saving in theoretical models depends on the metric one uses for risk. For labor-income risk, second-degree increases in risk require prudence to induce increased saving demand. However, prudence is not necessary for first-degree risk increases and not sufficient for higher-degree risk increases. For increases in interest-rate risk, a precautionary effect and a substitution effect need to be compared. This paper provides necessary and sufficient conditions on preferences for an Nth-degree change in risk to increase saving. (C) 2008 Elsevier B.V. All rights reserved.