Advanced Search
MyIDEAS: Login

Attitudes towards income risk in the presence of quantity constraints

Contents:

Author Info

  • Schroyen, Fred

    () (Dept. of Economics, Norwegian School of Economics and Business Administration)

Registered author(s):

    Abstract

    Considering a consumer with standard preferences, I trace out the consequences for risk aversion and prudence of quantity constraints on markets. I first show how the effect can be decomposed into a price risk effect and an endogenously changing risk aversion/prudence effect. Next, I calibrate locally both effects on relative risk aversion and prudence, using estimates on household demand for durables and labour supply. Finally, I performa global numerical analysis of these effects. I conclude that quantity constraints have counter-intuitive and pronounced non-linear effects on risk attitudes.

    Download Info

    If 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.
    File URL: http://www.nhh.no/Admin/Public/DWSDownload.aspx?File=%2fFiles%2fFiler%2finstitutter%2fsam%2fDiscussion+papers%2f2011%2f07.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Department of Economics, Norwegian School of Economics in its series Discussion Paper Series in Economics with number 7/2011.

    as in new window
    Length: 39 pages
    Date of creation: 07 Apr 2011
    Date of revision:
    Handle: RePEc:hhs:nhheco:2011_007

    Contact details of provider:
    Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
    Phone: +47 55 959 277
    Fax: 5595 9100
    Email:
    Web page: http://www.nhh.no/sam/
    More information through EDIRC

    Related research

    Keywords: Household demand; income risk aversion; prudence; quantity constraints; labour supply.;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Andrew Postlewaite & Larry Samuelson & Dan Silverman, 2006. "Consumption Commitments and Employment Contracts," PIER Working Paper Archive 06-028, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 07 Dec 2006.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:hhs:nhheco:2011_007

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dagny Hanne Kristiansen).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.