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Husbands Might Really Be That Cheap


  • Matthew S. Chambers
  • Don E. Schlagenhauf


In this paper, we study the decision to purchase life insurance as part of a lifecycle plan of consumption, savings, and labor supply. Households are subject to idiosyncratic risk in their labor productivity as well as the composition and size of their family, and respond by accumulating savings, working, and purchasing life insurance to hedeg against death of an adult. Using a calibrated general equilibrium model that matches key facts from the income and wealth distribution, we estimate that consumption-smoothing motives produce excessive LI holdings relative to the data, even when load factors consistent with estimates are introduced

Suggested Citation

  • Matthew S. Chambers & Don E. Schlagenhauf, 2004. "Husbands Might Really Be That Cheap," 2004 Meeting Papers 146, Society for Economic Dynamics.
  • Handle: RePEc:red:sed004:146

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    Cited by:

    1. Jay H. Hong & José-Víctor Ríos-Rull, 2012. "Life Insurance and Household Consumption," American Economic Review, American Economic Association, vol. 102(7), pages 3701-3730, December.

    More about this item


    Life Insurance; Demographics;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income

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