ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)最新文献

{"title":"Caring and Sharing: Tests between Alternative Models of Intra-Household Allocation","authors":"M. Browning, V. Lechêne","doi":"10.2139/ssrn.1791726","DOIUrl":"https://doi.org/10.2139/ssrn.1791726","url":null,"abstract":"Several models of intra-household decision making have been suggested in the literature. We present a framework that includes all suggested models and variants as special cases. We derive the theoretical predictions of these models for the relationship between expenditures on goods and the intra-household distribution of income. We estimate and test between these relationships using Canadian household expenditure data. We conclude that there is evidence that both husbands and wives care for each other in the sense that with an unequal distribution of incomes the high income partner behaves as a `Becker dictator' and there is local income pooling. We further find that for about half of the households in our sample (those with more equal incomes) a re-distribution of income would lead to changes in budget allocations. We conclude that the data are consistent with a collective model with caring partners.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"177 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2001-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132166457","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Optimal Asset Allocation Towards the End of the Life Cycle: To Annuitize or Not to Annuitize?","authors":"M. Milevsky","doi":"10.2139/ssrn.1077","DOIUrl":"https://doi.org/10.2139/ssrn.1077","url":null,"abstract":"Most individuals must decide how much, if any, of their wealth should be annuitized at about the time they retire. For many people a large portion of wealth is forcefully annuitized, for example pensions and government social security. In other cases and with remaining marketable wealth consumers have discretion in the matter. In its most general form, purchasing an immediate life annuity involves paying a non-refundable lump sum to an insurance company in exchange for a guaranteed constant life-long consumption stream that can not be outlived. The natural alternative to annuitization is individual strategic asset allocation amongst the various investment classes, such as equity, fixed income and real estate, together with a fixed periodic consumption from capital, dividends and interest. Unfortunately, this do it yourself strategy runs the financial risk of under-funding retirement in the event of long-run inferior investment returns in conjunction with unexpected human longevity. This paper develops a normative model that will provide a relevant framework for the choice between asset allocation and discretionary annuitization at retirement. The paradigm will be rich enough to accommodate the altruistic desire for bequest as well as the fundamental pre-occupation with consumption security. Our methodology deviates somewhat from the traditional financial economic approach to asset allocation and insurance, where the investor in question is assumed to maximize a well defined microeconomic utility function over all states of nature. Rather, we focus on the probability of consumption shortfall as the implicit risk measure and operational objective function. Our model allows individuals to input their own parameters for stochastic market performance and obtain the optimal age at which to annuitize, based on a probabilistic tolerance level. As a byproduct, using our own estimates, we are able to confirm the intuition shared by many in the financial planning community. Namely, given the empirical evidence on the cost structure of annuities, the adverse selection implicit in annuity mortality tables together with the long- run propensity for equities to outperform fixed income investments, otherwise known as time-diversification, it makes very little sense for consumers under the age of 80 to annuitize any additional marketable wealth. In essence, the rate of return from a life annuity can easily be \"beaten\" using alternative investment assets. The exception to this rule is the event in which (mean reverting) interest rates are extraordinarily high or when consumers have private (asymmetric) health information that would lead them to believe that they are much healthier than average, both of which rarely occur.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1996-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130804960","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"401(K) Plans and Tax-Deferred Saving","authors":"J. Poterba, Steven F. Venti, D. Wise","doi":"10.3386/W4181","DOIUrl":"https://doi.org/10.3386/W4181","url":null,"abstract":"This paper examines the role of 40 1(k) plans in retirement saving by U.S. households. It charts the rapid growth of these plans during the 1980s; more than 15 million workers now participate in 401(k)s. Data from the Survey of Income and Program Participation are used to calculate 401(k) eligibility and participation rates by detailed age and income categories. For virtually all groups, 401(k) participation rates conditional on eligibility are much higher than take-up rates for IRAs, suggesting some important differences between these saving vehicles. We consider the interaction between 401(k)s and IRAS, and show that since 1986, only one-fifth of 401(k) contributors have also made IRA contributions. Some 401 (k) eligibles who make limit contributions to their IRAs do not make 401(k) contributions. We also explore whether contributions to 401(k) plans represent \"new saving.\" Comparing the net worth of households that are eligible for 401(k)s with that of households that are not eligible, and comparing the net worth of households that have been eligible for 401(k)s for many years with those who have been eligible for short periods, suggests that 401(k) saving has a negligible effect in displacing other private saving.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1992-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129179858","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"But They Don&Apos;T Want to Reduce Housing Equity","authors":"Steven F. Venti, D. Wise","doi":"10.3386/W2859","DOIUrl":"https://doi.org/10.3386/W2859","url":null,"abstract":"The majority of the wealth of most elderly is in the form of housing equity. It is often claimed that many elderly would transfer wealth from housing to finance current consumption expenditure, were it not for the large transaction costs associated with changes in housing equity. This is the rationale for a market in reverse annuity mortgages. This paper considers whether transaction costs, understood to include the psychic costs associated with leaving friends, family surroundings, and the like, prevent the elderly from making choices that would improve their financial circumstances. The analysis considers jointly the probability that an elderly family will move and the housing equity that is chosen when a move occurs. The results are based on the decisions of the Retirement History Survey sample between 1969 and 1919. Relative to the potential gains from a reallocation of wealth between housing equity and other assets, transaction costs are very large. Nonetheless, the effect on the housing equity of the elderly is very small. On balance, were all elderly to move and choose optimum levels of housing equity, the amount of housing equity would be increased slightly. Most elderly are not liquidity constrained. And contrary to standard formulations of the life cycle hypothesis, the typical elderly family has no desire to reduce housing equity. The desired reduction of housing equity is largest among families with low income and high housing wealth, but even in this case the desired reductions are rather small. And these desired reductions are more than offset by the desired increases of other families, especially those with high income and low housing wealth. Thus, consistent with the previous findings of Venti and Wise and of Feinstein and McFadden, limited demand may explain the absence of a market for reverse annuity mortgages.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1989-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122520042","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}