Limited participation and consumption-saving puzzles: A simple explanation and the role of insurance

被引:259
作者
Gormley, Todd [2 ]
Liu, Hong [1 ]
Zhou, Guofu [1 ]
机构
[1] Washington Univ, John M Olin Sch Business, St Louis, MO 63130 USA
[2] Univ Penn, Wharton Sch, Philadelphia, PA 19104 USA
关键词
Limited participation; Insurance; Saving; Consumption; HEALTH-INSURANCE; PORTFOLIO CHOICE; HABIT FORMATION; LABOR INCOME; UNCERTAINTY; LIQUIDITY; GROWTH; MODEL;
D O I
10.1016/j.jfineco.2010.01.001
中图分类号
F8 [财政、金融];
学科分类号
020219 [财政学(含:税收学)];
摘要
In this paper, we show that the existence of a large, negative wealth shock and insufficient insurance against such a shock could explain both the limited stock market participation puzzle and the low-consumption-high-savings puzzle. We then conduct an empirical analysis on the relation between household portfolio choices and access to private insurance and various types of government safety nets. The empirical results demonstrate that a lack of insurance against large, negative wealth shocks is positively correlated with lower participation rates and higher saving rates. Overall, the evidence suggests an important role of insurance in household investment and savings decisions. (C) 2010 Elsevier B.V. All rights reserved.
引用
收藏
页码:331 / 344
页数:14
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