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The impact of social capital on consumption insurance and income volatility in the UK: evidence from the British Household Panel Survey

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  • F. Pericoli
  • E. Pierucci
  • L. Ventura

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Abstract

On British Household Panel Survey data we measure various indices of social capital at the individual and household level, and use them as explanatory variables in standard consumption insurance tests. We find that two out of three aspects of social capital positively impact on consumption smoothing, by reducing the sensitivity of idiosyncratic consumption to idiosyncratic income, both in the long and in the short run. Such effects, however, turn out to be more pronounced in the long run. Further confirmation of the positive impact of social capital on insurance opportunities are derived from an income smoothing exercise, as well as from a Poisson and a Logit analysis on the occurrence of unemployment spells. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • F. Pericoli & E. Pierucci & L. Ventura, 2015. "The impact of social capital on consumption insurance and income volatility in the UK: evidence from the British Household Panel Survey," Review of Economics of the Household, Springer, vol. 13(2), pages 269-295, June.
  • Handle: RePEc:kap:reveho:v:13:y:2015:i:2:p:269-295
    DOI: 10.1007/s11150-013-9185-x
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    References listed on IDEAS

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    1. repec:bla:jageco:v:68:y:2017:i:2:p:494-517 is not listed on IDEAS

    More about this item

    Keywords

    Consumption insurance; Social capital; Income volatility; Item response theory; A14; C33; D12; D80;

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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