On the substitution between saving and prevention
This work makes a joint analysis of prevention and saving decisions. First we determine the optimal levels of the two variables and we analyze substitution between them. Second we provide some comparative statics results in order to determine the effects on optimal saving and prevention of changes in exogenous present and future wealth and in possible future loss. Finally we introduce insurance into the model and we extend the separation result, derived in the literature which studies the substitution between insurance and saving, to the case where prevention is considered too.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Postal: Via J.F. Kennedy 6, 43100 PARMA (Italy)|
Web page: http://economia.unipr.it/de
More information through EDIRC
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.:
- A. Sandmo, 1970. "The Effect of Uncertainty on Saving Decisions," Review of Economic Studies, Oxford University Press, vol. 37(3), pages 353-360.
- Bruno Jullien & Bernard Salanié & François Salanié, 1998.
"Should More Risk-Averse Agents Exert More Effort,"
98-12, Centre de Recherche en Economie et Statistique.
- L. Eeckhoudt & C. Gollier, 2005.
"The impact of prudence on optimal prevention,"
- Dionne, Georges & Li, Jingyuan, 2011.
"The impact of prudence on optimal prevention revisited,"
Elsevier, vol. 113(2), pages 147-149.
- Jingyuan Li & Georges Dionne, 2010. "The Impact of Prudence on Optimal Prevention Revisited," Cahiers de recherche 1024, CIRPEE.
- Dionne, G. & Eeckhoudt, L., 1984.
"Self-Insurance, Self-Protection and Increased Risk Aversion,"
Cahiers de recherche
8424, Universite de Montreal, Departement de sciences economiques.
- Dionne, Georges & Eeckhoudt, Louis, 1985. "Self-insurance, self-protection and increased risk aversion," Economics Letters, Elsevier, vol. 17(1-2), pages 39-42.
- DIONNE, George & EECKHOUDT, Louis, . "Self-insurance, self-protection and increased risk aversion," CORE Discussion Papers RP 623, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Menegatti, Mario, 2009.
"Optimal prevention and prudence in a two-period model,"
Mathematical Social Sciences,
Elsevier, vol. 58(3), pages 393-397, November.
- M. Menegatti, 2008. "Optimal prevention and prudence in a two-period model," Economics Department Working Papers 2008-EP03, Department of Economics, Parma University (Italy).
- L. Eeckhoudt & Rachel J. Huang & Larry Y. Tzeng, 2012.
"Precautionary Effort: A New Look,"
- Kimball, Miles S, 1990.
"Precautionary Saving in the Small and in the Large,"
Econometric Society, vol. 58(1), pages 53-73, January.
- Miles S. Kimball, 1989. "Precautionary Saving in the Small and in the Large," NBER Working Papers 2848, National Bureau of Economic Research, Inc.
- Dionne, G. & Eeckhoudt, L., 1982.
"Insurance and Saving: Some Further Results,"
Cahiers de recherche
8231, Universite de Montreal, Departement de sciences economiques.
- Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-48, July-Aug..
- Robert E. Hall, 1981.
"Intertemporal Substitution in Consumption,"
NBER Working Papers
0720, National Bureau of Economic Research, Inc.
- Menegatti, Mario, 2001. "On the Conditions for Precautionary Saving," Journal of Economic Theory, Elsevier, vol. 98(1), pages 189-193, May.
- Rothschild, Michael & Stiglitz, Joseph E., 1971. "Increasing risk II: Its economic consequences," Journal of Economic Theory, Elsevier, vol. 3(1), pages 66-84, March.
When requesting a correction, please mention this item's handle: RePEc:par:dipeco:2010-ep03. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Andrea Lasagni)
If references are entirely missing, you can add them using this form.