IDEAS home Printed from https://ideas.repec.org/p/fth/colubu/92-22.html
   My bibliography  Save this paper

Keeping Up with the Joneses: Consumption Externalities, Portfolio Choice and Asset Prices

Author

Listed:
  • Gali, J.

Abstract

The author studies the implications for optimal portfolio decisions and equilibrium asset prices of the hypothesis that agents care about other agents' consumption level (in addition to their own). That hypothesis is introduced in two settings: (1) a one-period CAPM model and (2) a multiperiod asset pricing model. The presence of externalities is shown to affect the optimal risky share, as well as the size of adjustments in the latter in response to exogenous changes in the risk-adjusted equity premium. In equilibrium, the equity premium is also affected by the sign and the intensity of the externalities. Copyright 1994 by Ohio State University Press.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Gali, J., 1992. "Keeping Up with the Joneses: Consumption Externalities, Portfolio Choice and Asset Prices," Papers 92-22, Columbia - Graduate School of Business.
    • Handle: RePEc:fth:colubu:92-22
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    More about this item

    Keywords

    consumption ; prices;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fth:colubu:92-22. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Krichel (email available below). General contact details of provider: https://edirc.repec.org/data/gsclbus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.