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Consumption Insurance between Japanese Households

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Author Info
Kohara, Miki
Abstract

This paper examines the implication of the full insurance hypothesis and differences in its applicability across groups of households in Japan. Using a rare Japanese individual panel data set called the Japanese Panel Survey of Consumption, the paper first shows that the full insurance hypothesis is strongly rejected for the country as a whole. The paper further shows that the rich as well as the poor, and also college graduates as well as non-college graduates cannot insure their consumption against income shocks. In sharp contrast, urban residents can pool income shocks completely, whereas rural residents cannot. Rural residents suffer from income risks more seriously than urban residents in Japan. Copyright 2001 by Taylor and Francis Group

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Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 33 (2001)
Issue (Month): 6 (May)
Pages: 791-800
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Handle: RePEc:taf:applec:v:33:y:2001:i:6:p:791-800

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  1. Naohito Abe & Tomoaki Yamada, 2004. "Life-Cycle Model and Consumption: Structural Estimation of Precautionary and Life-Cycle Motives (in Japanese)," Hi-Stat Discussion Paper Series d04-37, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
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