Risk and time preferences: saver types
AbstractIn an extended variant of the life-cycle hypothesis, saving behaviour is shown to depend crucially on the interaction between two preference parameters : γ, which represents risk attitudes (aversion, prudence...), and δ, the rate of time depreciation. Hence, the predictions of four specific accumulation regimes : the Armchair investors (high γ, low δ) ; the Entreprising (low γ, low δ) ; the Hotheads (low γ, high δ) ; and the Short-sighted prudent (high γ, high δ). The Insee "Patrimoine 1997" survey allows to obtain global relative measures of the two preference parameters. An econometric analysis of the amount and composition of wealth shows then that this savers' typology has sizeable explanatory power, with effects as predicted. Ceteris paribus, "armchair investors" accumulate more wealth than other households. Hotheads own less homes and Pep (insurance saving products), short-sighted prudent less (often) stocks, and these two types of savers invest less in long-term saving (whether for housing or retirement) than the other categories.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HAL in its series PSE Working Papers with number halshs-00590722.
Date of creation: Sep 2005
Date of revision:
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00590722
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/
risk aversion ; time preference ; wealth ; portfolio choice;
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).
If references are entirely missing, you can add them using this form.