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Consumption insurance and entrepreneurial risk: Evidence from Italian micro-data

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  • Carlo Declich
  • Luigi Ventura

Abstract

Using cross-sectional data from the Bank of Italy's Survey on Household Income and Wealth, we make an attempt to assess the relevance of entrepreneurial risk, i.e., idiosyncratic risk borne by firm owners while running their operations. Our new testing procedure will show that progressively more articulated forms of entrepreneurship do not enjoy a larger degree of risk sharing and will suggest some links between a larger or smaller degree of consumption insurance and variables such as net wealth, asset holding, and net indebtedness. Copyright Academy of Economics and Finance 2003

Suggested Citation

  • Carlo Declich & Luigi Ventura, 2003. "Consumption insurance and entrepreneurial risk: Evidence from Italian micro-data," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 27(1), pages 1-18, March.
    • Handle: RePEc:spr:jecfin:v:27:y:2003:i:1:p:1-18
    DOI: 10.1007/BF02751587
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    References listed on IDEAS

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    1. McCarthy, Jonathan, 1995. "Imperfect insurance and differing propensities to consume across households," Journal of Monetary Economics, Elsevier, vol. 36(2), pages 301-327, November.
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    4. Grimard, Franque, 1997. "Household consumption smoothing through ethnic ties: evidence from Cote d'Ivoire," Journal of Development Economics, Elsevier, vol. 53(2), pages 391-422, August.
    5. Jalan, Jyotsna & Ravallion, Martin, 1999. "Are the poor less well insured? Evidence on vulnerability to income risk in rural China," Journal of Development Economics, Elsevier, vol. 58(1), pages 61-81, February.
    6. Mehra, Rajnish & Prescott, Edward C., 1985. "The equity premium: A puzzle," Journal of Monetary Economics, Elsevier, vol. 15(2), pages 145-161, March.
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