Insurance and portfolio decisions: Two sides of the same coin?

نویسندگان

چکیده

We study insurance and portfolio decisions, two opposite risk retention tradeoffs. Using household level data, we identify the first joint determinants (e.g. subjective expectations, attitude) frictions liquidity constraints, financial literacy) in literature. also find key differences between decisions. Notably, contrary to economic intuition, risky asset holding coverage both increase with wealth. show that this apparent puzzle is driven part by a specific behavioral pattern (the poor invest too conservatively, while rich over-insure), can be explained factors: regret avoidance nonperformance risk.

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ژورنال

عنوان ژورنال: Journal of Financial Economics

سال: 2023

ISSN: ['1879-2774', '0304-405X']

DOI: https://doi.org/10.1016/j.jfineco.2023.03.003