Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142649
Authors: 
Limosani, Michele
Millemaci, Emanuele
Year of Publication: 
2012
Series/Report no.: 
EERI Research Paper Series 20/2012
Abstract: 
This paper focuses on the estimation of the importance of the precautionary motive in the wealth accumulation decision. We use a micro dataset containing information on wealth, a subjective measure of income uncertainty and subjective indicators of risk aversion. The latter makes us possible to account for the fact that more risk averse individuals may select themselves into less risky occupations and, therefore, bias results. Restricting our analysis on male employees heads of households living with partner and children, we find that only a small share of wealth is accumulated for the precautionary motive. Our findings suggest that the more risk averse individuals are those who hold less savings. When heterogeneous risk aversion is not taken into account, estimates do not seem to change significantly.
Subjects: 
Intertemporal choice
Subjective expectations
Precautionary savings
Precautionary wealth
Risk aversion
JEL: 
D10
D91
D84
Document Type: 
Working Paper

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