Household Portfolios and Risk Bearing over Age and Time
AbstractWe exploit the US Survey of Consumer Finances from 1998 to 2007 to study households’ portfolio risk bearing. We compare four alternative measures of risk, two based on a financial portfolio and two based on a broader portfolio also including – as illiquid assets – human capital, real estate, business wealth and related debt. The measures provide a different ranking of household risk bearing, but they consistently show that risk bearing fell after 2001, and it positively correlates with wealth, income and financial sophistication. Furthermore, the risk-age profile is sensitive to the definition of portfolio, although it looks flat for many years.
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Bibliographic InfoPaper provided by University of Verona, Department of Economics in its series Working Papers with number 15/2011.
Date of creation: Oct 2011
Date of revision:
household finance; risk bearing; background risk; real estate; human capital;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
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