Stability of Time Preferences Individuals frequently face intertemporal decisions. For the purposes of economic analysis, the preference parameters assumed to govern these decisions are generally considered to be stable economic primitives. However, evidence on the stability of time preferences is notably lacking. In a large field study conducted over two years with about 1,400 individuals, tim...

We implement a dynamic asset pricing experiment in the spirit of Lucas (1978) with storable assets and non-storable cash. In one treatment we impose diminishing marginal returns to cash to incentivize consumption-smoothing across periods, while in a second treatment there is no induced motive for trade. In the former case we find that subjects use the asset to smooth consumption though the asse...

In this paper we examine the relationship between the timing of food stamp receipt and consumption patterns. We combine data on state distribution dates with scanner data on a panel of households. Consistent with previous work we find that purchases of a variety of goods are higher on receipt days. Additionally, we find that when receipt days are more likely to be on weekends, total monthly con...

Empirical evidence suggests that parents who have themselves inherited from their own parents are more likely to leave an estate to their children even after controlling for income, wealth and education. This implies an indirect reciprocal behavior between three generations by transmitting the attitude towards bequeathing from one generation to the next. We incorporate such an intergenerational...

The evaluation of policies designed to increase the early investment in children requires knowledge of the parents’ preferences for expenditure on children. In this paper it is shown that these preferences can be recovered using variables available in commonly used datasets. The method proposed in this paper improves upon the approach developed by Blundell, Chiappori, and Meghir (2005) in two w...

In this paper we show that it may be optimal for individuals to educate themselves more and decrease future labor supply (choose earlier retirement) when life expectancy increases. This result reconciles the …ndings of Hazan [Hazan, M., 2009. Longevity and Lifetime Labor Supply: Evidence and Implications. Econometrica 77, 1829–1863] with theory. Further, the paper contributes to a better unders...

We examine the intertemporal optimal consumption and investment problem in a continuous-time economy with a divisible durable good. Consumption services are assumed to be proportional to the stock of the good held and adjustment of the stock is costly, in that it involves the payment of a proportional transaction cost. For the case in which the investor has an isoelastic utility function and as...

Using data from the 2001 Survey of Consumer Finances, this study examines how the holding of types and amounts of household debt changes over the life cycle. The results show that the likelihood of holding each type of debt and the amount of each type of debt compared to total assets decrease with age. Although the popular press has speculated that older households accumulate excessive amounts ...

This paper investigates the current important issue in Taiwan that the impact of foreign workers on the rising unemployment rate by constructing a dynamic intertemporal general equilibrium model. The results show that foreign workers rob jobs from the local unskilled labor and raise the unemployment rates during the past decade. However, extending the time frame to a longer term, an increasing ...

We examine the effect of labor income and health uncertainty on the optimal choices of policyholders with Guaranteed Minimum Death Benefits embedded in Variable Annuities. These choices are determined in the context of a utility-based life cycle model including bequest motives and optimal term life purchases. We then determine riskneutral prices from the perspective of the issuing financial ins...