hot stuff index insurance for indian pepper growers summary we simulate the impact of a joint price and yield index insurance on the basis of a small representative panel data set of indian smallholder pepper growers affordable and feasible index insurance reduces crop revenue risk to around 68 of its original level while a reduction to 50 of this level can be achieved with ideal insurance basis risk is large for only a small fraction of farm households depending on risk aversion 5 30 of farm households is willing to pay for index insurance increasing to 12 50 with a 50 premium reduction opportunity costs of consumption smoothing in the form of lower productivity levels suggest potential welfare gains of specialization with insurance

designing and rating an area yield crop insurance contract this article documents the design and rate making procedures used in the development of the group risk plan grp the new federal crop insurance product that insures based on area yield the authors of this article worked closely with personnel in the federal crop insurance corporation and others in developing methodological and practical constraints needed in implementing a workable area yield contract grp indemnity payments are made based on percentage shortfalls in actual county yields relative to a forecasted yield historical county yield data are used to develop forecasted yields and premium rates

transforming competitiveness into economic benefits does tourism stimulate economic growth in more competitive destinations abstract this research note investigates the impact of a destination s competitiveness upon tourism s contribution to economic growth using a cross section with 131 countries destination competitiveness is measured with the world economic forum s travel and tourism competitiveness index while tourism s contribution to economic growth is measured with the growth decomposition methodology results reveal that destination competitiveness has no statistically significant impact on tourism s contribution to economic growth tourism policy implications and directions for future research are also discussed

constrained efficient contracts for area yield crop insurance with area yield crop insurance indemnification occurs when area yield falls below a yield trigger that is chosen by the producer the maximum value for this yield trigger is generally restricted e g 80 of the long term area average yield the impact of this trigger constraint on the optimal design of an area yield insurance contract is examined within the constrained efficient contract indemnities consist of both a lump sum payment and a payment that is proportional to the yield shortfall because lump sum payments may not be feasible to implement efficiency enhancing modifications to standard contracts are also proposed copyright 2000 oxford university press

a life cycle consumption model with liquidity constraints theory and empirical results a structural consumption model incorporating endogenous liquidity constraints is fit to a cross section of 798 u s families liquidity constrained families are estimated to constitute 19 4 percent of the population sampled a group that accounts for 16 7 percent of consumption in the population sampled in sample simulations of the model suggest that a temporary tax has three to four times more impact on aggregate consumption than it would if liquidity constraints were not in effect copyright 1987 by the econometric society

does market competitiveness significantly affect public intervention in agricultural insurance the case in italy analyses of agricultural insurance failures often assume the existence of competitive supply tracing the reasons for high insurance cost and limited farmer participation to informational problems and suggesting the need for premium subsidization in order to increase participation however in countries such as spain and italy where agricultural insurance is most highly subsidized it could be that supply is not fully competitive in this article we explore the incidence of public subsidies to agricultural insurance premia when supply is noncompetitive through the use of a simple empirical model of an insurance market it is shown that while in the case of a competitive supply subsidies to insurance would benefit farmers a monopolistic supply would capture most of the subsidy thus eliminating the potential incentive towards wider participation by farmers the model is applied to a panel of italian farms for different levels of risk aversion to demonstrate the limited effect that a subsidy to a hyp

how stable is the tourism led growth hypothesis in malaysia evidence from disaggregated tourism markets abstract we contribute to the tourism growth literature by applying the newly developed combined cointegration test and the recursive granger causality test to re assess the stability of the tourism led growth hypothesis in malaysia with respect to 12 different tourism markets the cointegration test results suggest that economic growth of malaysia is cointegrated with all the 12 selected tourism markets however the recursive granger causality test shows that the tourism led growth hypothesis in malaysia is valid and stable with respect to tourist arrivals from only 8 out of the 12 tourism markets almost all of them are from developed countries hence not all international visitor arrivals could effectively drive the growth of the malaysian economy in light of this tourism marketing policies should focus more on those tourism markets that could significantly stimulate economic growth however there should not be total neglect of others as they potentially contribute to the economies of scale

changes in food purchases at retirement in france abstract we estimate the impact of retirement on food expenditure and food quantities purchased using detailed home scan panel data on food purchases and household characteristics in france we identify a causal relationship by exploiting the french legal minimum age for retirement as an exogenous shock to retirement behavior upon retirement households significantly decrease their expenditure on food and the amount of food purchased households with lower pre retirement income appear to be more severely affected our results indicate that the decrease in food quantities purchased at the aggregate level is driven by a decline in purchases of food from animal origins a reduced consumption of animal based food products is likely to undermine the diet balance of retirees

modeling conditional yield densities given the increasing interest in agricultural risk many have sought improved methods to characterize conditional crop yield densities while most have postulated the beta as a flexible alternative to the normal others have chosen nonparametric methods unfortunately yield data tends not to be sufficiently abundant to invalidate many reasonable parametric models this is problematic because conclusions from economic analyses which require estimated conditional yield densities tend not to be invariant to the modeling assumption we propose a semiparametric estimator that because of its theoretical properties and our simulation results enables one to empirically proceed with a higher degree of confidence copyright 2003 oxford university press

optimum area yield crop insurance cet article determine le contrat optimal d assurance dont l indemnite depend du rendement agrege sur recoltes d un bassin de production le schema optimal d assurance est base sur le coefficient individuel de regression qui mesure la sensibilite du rendement agrege a des variations du rendement agrege une indemnite est versee lorsque le rendement agrege est inferieur superieur a un rendement critique si le coefficient de regression est positif negatif le contrat optimal contient une franchise evanescente si le coefficient de regression est superieur a l unite

poverty traps and index based risk transfer products summary a growing literature suggests that in low income countries households with few assets can be trapped in chronic poverty this article reviews relevant threads of the poverty traps literature to motivate a description of the opportunities presented by innovative index based risk transfer products these products can be used to address some insurance and credit market failures that contribute to the persistence of poverty among households in low income countries applications are considered at the micro meso and macro levels 2008 elsevier ltd all rights reserved

a century of research on agricultural markets this article provides a perspective on major innovations in research on agricultural markets over the past century we review research on market structure and performance vertical coordination arrangements and institutions for producer collective action contributions to empirical modeling of agricultural price determination and marketing margins are also evaluated as are innovations in research on spatial market relationships and the role of storage finally we discuss contributions to understanding market information systems and the functioning of market based mechanisms for agri

are u s corn and soybeans becoming more drought tolerant an objective drought index that measures the dry and hot conditions adversely affecting crop yields is used in a regression analysis to test whether corn and soybeans have become more drought tolerant results indicate that corn yield losses whether measured in quantity terms or as a percentage of mean yield have decreased the null hypothesis that the absolute level of soybean yield losses due to drought has not changed cannot be rejected but yield losses in percentage terms have decreased over time because drought is the primary cause of yield loss in the u s crop insurance program and because u s crop insurance rates assume that percentage of yield losses are constant over time these results indicate that u s crop insurance rates in the corn belt are too high

aggregation in area yield crop insurance the linear additive model previous analyses of area yield crop insurance have used a linear additive model lam to express the relationship between individual and area yield however the theoretical foundations of the lam are unknown this shortcoming is addressed by establishing two conditions linking microvariables and lam parameters the conditions relate to the interaction of risks in individual technologies and the extent of aggregation if systemic and individual risks are additive in individual yields and if the law of large numbers hold then the lam obtains this article also shows how departures from these conditions affect the results derived from a lam analysis a classic issue in agricultural economics is the design of schemes that would offer insurance against risks in agriculture the experience with conventional crop insurance has been disappointing as insurers have struggled to obtain reliable actuarial data on individual yields skees black and barnett the primary attraction of area yield insurance schemes is that insurers do not have to contend with the informational problems of moral hazard and adverse selection halcrow these problems can be dismissed because indemnities and premiums are based not on a producer s individual yield but rather on the aggregate yield of a surrounding geographical area however the key question is how adequate are aggregate yield instruments for reducing the risks faced by producers to address this question previous studies have expressed individual yields as a linear stochastic function of area yield mahul miranda vercammen the approach has been to use the form of a linear regression model where the dependent variable is the yield of an individual producer the only independent variable is area yield and the additive random error term measures omitted individual specific factors uncorrelated with area yield thus the model decomposes variations in individual yield in to variations in area yield that represent systemic risk and bharat ramaswami is senior economist in the indian statistical

parametric and nonparametric statistical modelling of crop yield implications for pricing crop insurance contracts this article considers alternative methods to calculate the fair premium rate of crop insurance contracts based on county yields the premium rate was calculated using parametric and nonparametric approaches to estimate the conditional agricultural yield density these methods were applied to a data set of county yield provided by the statistical and geography brazilian institute ibge for the period of 1990 through 2002 for soybean corn and wheat in the state of parana in this article we propose methodological alternatives to pricing crop insurance contracts resulting in more accurate premium rates in a situation of limited data

consumption during retirement the missing link in the life cycle this study presents the first evidence on the relation of consumption to lifetime wealth based on data from the 1973 and 1975 retirement history survey that have been linked to social security earnings records nearly 500 white married fully retired couples ages 62 69 form the basis of the analysis on average their consumption early in retirement exceeds by 14 percent the income that their financial pension and social security wealth can generate this implies that their saving both private and through social security is insufficient to sustain consumption throughout the rest of their lives additional evidence based on changes in spending between 1973 and 1975 shows that these households respond by reducing their real consumption at a rate sufficient to generate positive changes in net financial worth within a few years after retirement these two pieces of evidence can be rationalized by a rate of time preference much higher than the interest rate coupled with either a bequest motive or uncertainty about the length of life they also imply that even when combined with private pensions and savings social security in the united states today does not enable most recipients to maintain their living standard at the levels they enjoyed before they retired this abstract was borrowed from another version of this item

crop insurance in a political economy an alternative perspective on agricultural policy lawmakers often subsidize farmers in times of financial distress this article models this political impulse as a constraint on government farm policy describing how ex ante government farm insurance can deter ex post disaster relief and improve production incentives by countering the moral hazard that otherwise prevails absent ex ante government policy ex post relief takes the form of revenue insurance which prompts excessive entry into farm production and under production by operating farmers ex ante government policy can raise economic and political welfare by buying out low productivity farmers and offering profitable farmers a combination of revenue insurance price supports and a program participation fee copyright 2003 oxford university press

an empirical analysis of the demand for multiple peril crop insurance knowledge of factors affecting farmer purchases of crop insurance is essential for evaluating the soundness and profitability of crop insurance programs despite this importance the demand for crop insurance has received limited empirical attention the present paper reports on an empirical assessment of the demand for crop insurance by iowa corn producers adverse selection in the insured pool suggests that producers with differing levels of loss risk have different demand elasticities loss risk is included in the empirical analysis and is found to influence the elasticity of demand results show average demand elasticities of about 0 32 for relative insured acres and 0 73 for liability per planted acre implications for the actuarial soundness of the industry are provided

coping with systemic risk in index based crop insurance the implementation of index based crop insurance is often impeded by the existence of systemic risk of insured losses we assess the effectiveness of two strategies for coping with systemic risk regional diversification and securitization with catastrophe cat bonds the analysis is conducted in an equilibrium pricing framework which allows the optimal price of the insurance and the number of traded contracts to be determined we also explore the role of basis risk and risk aversion of market agents the model is applied to a hypothetical area yield insurance for rice producers in northeast china if yields in two regions are positively correlated we find that enlarging the insured area leads to higher insurance premiums unless capital market investors are very risk averse a cat bond written on an area yield index outperforms regional diversification in terms of certainty equivalents of both farmers and insurers

destination competitiveness applying different models the case of slovenia abstract a tourism country s competitiveness is important especially when countries strive for bigger market shares tourism managers have to identify and explore competitive advantages and analyse the destination s competitive position the degree to which a country can benefit from its tourism sector depends largely on this sector s competitive position in the international tourist market this paper refers to the de keyser vanhove model of a competitive destination which was applied to slovenia in 1998 it also studies the integrated model of destination competitiveness developed in a collaborative effort of researchers dealing with the cases of korea and australia and examines its determinants and individual competitive indicators as perceived by slovenian tourist stakeholders on the supply side the result shows that slovenia is more competitive in its natural cultural and created resources but less competitive in the management of tourism and according to the integrated model demand conditions with both uncompetitive elements reducing the slovenian tourism industry s ability to add value the end discussion points out weaknesses in the development of tourism competitiveness models and calls for greater unity with the competitiveness factor theory and for more caution when creating the main competitiveness factors and models

optimal area yield crop insurance reconsidered the implementability of area yield insurance contracts in the presence of symmetric and asymmetric information about the farmer s beta linking his yield to the risk pool s yield is examined in the presence of fixed costs and symmetric information mahul s result that optimality requires setting the slope of the indemnity schedule equal to each farmer s beta is confirmed when there is asymmetric information between the insurer and the farmer however this full insurance contract is vulnerable to adverse selection and therefore may not be implementable for general cost structures the optimal area yield insurance contract under asymmetric information is characterized

retirement consumption insights from a survey abstract prior research has established that consumption falls significantly at retirement what is not known is the extent to which this fall is anticipated during the working years using data from a new survey we show that many working households do expect a considerable fall in consumption when they retire in fact those who are already retired report significantly smaller falls in consumption than are expected by those who are still working

is there a viable market for area based crop insurance the performance of area yield insurance and farm level multiple peril crop insurance is analyzed for cotton and soybean production in georgia and south carolina the analysis improves on many previous studies by utilizing actual farm level yield data and by comparing the two types of insurance products not only for actuarially fair premium rates but also for actual unsubsidized and subsidized premium rates results suggest that even in heterogeneous production regions area yield insurance may be a viable alternative to farm level insurance when premium rates for farm level insurance contain large positive wedges

the retirement consumption conundrum evidence from a consumption survey abstract recent studies have shown that food consumption declines at retirement we use broader definitions of consumption from the consumer expenditure survey and find that the so called retirement consumption puzzle is solved by using comprehensive consumption data

optimal insurance against climatic experience an optimal insurance contract against a climatic risk is derived in the presence of an uninsurable and dependent aggregate production risk the optimaldesign depends on the stochastic dependency between both sources of uncertainty and on the producer s attitude towards risk especially on his prudent behavior rationalweather insurance purchasing decisions are al so derived the prudent producer responds to actuarially fair weather insurance by increasing his exposure towards risk the u s multiple peril crop insurance program in which indemnity payments are based on the producer s individualyiel ds has been disappointing in that premiums have not been sufficient to cover indemnity payments and administrative costs this failure has induced the u s government to promote alternative insurance policies since 1993 the risk management agency has offered areayield contracts under its group risk plan in selected counties skees black and barnett another alternative is to base the indemnity on a weather index such as rainfall or temperature this policy was proposed in the past by sanderson but has failed to gain acceptance among policy makers the difficulties of rainfall insurance were a subject of debate in australia e g bardsley abey and davenport quiggin 1986 patrick the recent development of weather based instruments on financialmarkets known as weather derivatives for which the payoff depends on the cause of risk rather than on its effect on yield provide new opportunities for covering exposure to unfavorable weather events the objective of this article is threefold first a stochastic production function affected by a climatic risk and by an aggregate production risk where both sources of risk are stochastically dependent is de

the retirement consumption puzzle evidence from a regression discontinuity approach in this paper we investigate the size of the consumption drop at retirement in italy we use micro data on food and total non durable household spending covering the period 1993 2004 and evaluate the change in consumption that accompanies retirement by exploiting the exogenous variability in pension eligibility to correct for the endogenous nature of the retirement decision we take a regression discontinuity design approach and make the identifying assumption that consumption would be the same around the threshold for pension eligibility if individuals would not retire we check in our data that a non negligible fraction of individuals retire as soon as they become eligible and estimate at 9 8 the part of the non durable consumption drop that is associated with retirement induced by eligibility we show that such fall is not driven by liquidity problems for the less well off in the population and can be accounted for by drops in goods that are work related expenses or leisure substitutes however we also show that retirement induces a significant drop in the number of grown children living with their parents and this can account for most of the retirement consumption drop

the retirement consumption puzzle in china abstract using data from china s urban household survey and exploiting china s mandatory retirement policy we use the regression discontinuity approach to estimate the impact of retirement on household expenditures retirement reduces total non durable expenditures by 20 percent among the categories of non durable expenditures retirement reduces work related expenditures and expenditures on food consumed at home but has an insignificant effect on entertainment expenditures after excluding these three components retirement does not have an effect on the remaining non durable expenditures it suggests that the retirement consumption puzzle might not be a puzzle if a life cycle model with home production is considered

valuing agricultural insurance this paper proposes a method for estimating a farmer s stochastic discount factor that is independent of his or her risk preferences and shows that that stochastic discount factor is appropriate for calculating a farmer s willingness to pay for a crop insurance product an empirical example illustrates how production and price data might be combined with returns data to permit econometric estimation of the stochastic discount factor and the implications of those illustrative results are briefly discussed

nonparametric estimation of crop insurance rates revisited with the crop insurance program becoming the cornerstone of u s agricultural policy recovering accurate rates is of paramount interest lack of yield data presents by far the most fundamental obstacle to recovery of accurate rates thisarticle employsnew methodology to estimate conditional yield densities and derive the insurance rates in our application we find the nonparametric kernel density estimator requires an additional twenty six years of yield data to estimate the shape of the conditional yield dens itiesasaccurately asthe recently developed empirical bayesnonparametric kernel density estimator such methodological improvements can significantly aid in ameliorating the data problem recovering accurate premium ratesis paramount to the actuarial soundness of the crop insurance program a program which hasgained prominence in the overall u s agricultural policy agenda the 1996 federal agricultural improvement and reform fair act signaled a new policy environment under which farmerswould be s to market forces under this policy regime crop insurance remains in some respects one of the only government subsidized income stabilizing mechanisms available to agricultural producers in addition it appears that current political forcesare in the proces sof fashioning crop insurance as the cornerstone of u s agricultural policy consider the 1999 state of the union address in which the president stated

a role for capital markets in natural disasters a piece of the food security puzzle abstract natural disaster can create significant shocks in food supplies for small country states these events are very disruptive to the development process market based means for managing natural disaster risk are emerging for example despite the failure of government subsidized crop insurance around the world it is now possible to create index based contracts that would trigger when events that create serious crop failure problems occur this paper investigates the logic for such contracts and some basic designs using measures of rainfall

the retirement consumption puzzle and involuntary early retirement evidence from the british household panel survey this article uses data from the british household panel survey bhps to shed further light on the fall in consumption at retirement the retirement consumption puzzle comparing food spending of men retiring involuntarily early through ill health or redundancy with spending of men who retire voluntarily it finds a significant fall in spending only for those who retire involuntarily this is consistent with the observed fall in spending being linked to a negative wealth shock for some retirees

investigating the performance of different estimation techniques for crop yield data analysis in crop insurance applications we investigate the performance of the ordinary least squares ols m mm and the theil sen ts estimator for crop yield data analysis in crop insurance applications using monte carlo simulations more specifically the performance is assessed with respect to trend estimation prediction of future yield levels and the estimation of expected indemnity payments in agreement with earlier findings other estimators are found to be superior to ols in simple regression problems if yield distributions are outlier contaminated and heteroscedastic while this conclusion is also valid for subsequent applications such as yield prediction and the estimation of expected indemnity payments the difference between the considered estimators becomes less distinct for these applications we find particularly the m estimator to be a good compromise between high breakdown very robust estimators and the very efficient ols estimator because no regression technique dominates all others in all applications and scenarios for error term distributions our results underline that the choice of the estimation technique should be dependent on the purpose of the crop yield data analysis however alternative estimators such as m mm and ts estimator can reduce and bound the risk of unreliable or inefficient crop yield data analysis in crop insurance applications

what accounts for the variation in retirement wealth among u s households even among households with similar socioeconomic characteristics saving and wealth vary considerably life cycle models attribute this variation to differences in time preference rates risk tolerance exposure to uncertainty relative tastes for work and leisure at advanced ages and income replacement rates these factors have testable implications concerning the relation between accumulated wealth and the shape of the consumption profile using the panel study of income dynamics and the consumer expenditure survey we find little support for these implications the data are instead consistent with rule of thumb mental accounting or hyperbolic discounting theories of wealth accumulation jel di d91 e21

on technological change in crop yields technological changes in agriculture tend to alter the mass associated with segments or components of the yield distribution as opposed to simply shifting the entire distribution upwards we propose modeling crop yields using mixtures with embedded trend functions to account for potentially different rates of technological change in different components of the yield distribution by doing so we can test some interesting and previously untested hypotheses about the data generating process of yields for example 1 is the rate of technological change equivalent across components and 2 are the probabilities of components constant over time our results technological change is not equivalent across components and probabilities tend not to have changed significantly over time have implications for modeling yields we find estimated conditional yield densities are quite different when unique trend functions are embedded inside the mixture components versus estimating the same mixture with detrended data also we prove different rates of technological change in different components lead to nonconstant variance with respect to time i e heteroscedasticity we present two applications of the proposed yield model the first application considers climate determinants of component membership where our results are consistent with the literature for climate determinants of yields the second application compares the proposed yield model to usda s current rating methodology for area yield crop insurance contracts and finds the proposed model may lead to more accurate rates

changes in subjective well being with retirement assessing savings adequacy does retirement represent a state of relative prosperity or unanticipated hardship to assess whether individuals are successful in smoothing their well being across the transition to retirement we analyse measures of subjective well being swb in the household income and labour dynamics in australia hilda survey specifically this research examines retirees current standard of living financial security and overall happiness relative to their pre retirement levels it is found swb either improves or remains constant for the large majority of individuals as they retire from the labour force however there are significant disparities in changes in well being with retirement among the group of retirees in particular the subset of individuals who are forced to retire early due to job loss or their own health and who find their income in retirement to be much less than expected report marked declines in their swb with retirement

bayesian estimation of possibly similar yield densities implications for rating crop insurance contracts the agricultural act of 2014 solidified insurance as the cornerstone of u s agricultural policy the congressional budget office 2014 estimates that this act will increase spending on agricultural insurance programs by 5 7 billion to a total of 89 8 billion over the next decade in light of the sizable resources directed toward these programs accurate rating of insurance contracts is of the utmost importance to producers private insurance companies and the federal government unlike most forms of insurance agricultural insurance is plagued by a paucity of spatially correlated data a novel interpretation of bayesian model averaging is used to estimate a set of possibly similar densities that offers greater efficiency if the set of densities are similar while seemingly not losing any if the set of densities are dissimilar simulations indicate that finite sample performance in particular small sample performance is quite promising the proposed approach does not require knowledge of the form or extent of any possible similarities is relatively easy to implement admits correlated data and can be used with either parametric or nonparametric estimators we use the proposed approach to estimate u s crop insurance premium rates for area type programs and develop a test to evaluate its efficacy an out of sample game between private insurance companies and the federal government highlights the policy implications for a variety of crop state combinations consistent with the simulation results the performance of the proposed approach with respect to rating area type insurance in particular small sample performance remains quite promising

estimation of mixture models using cross validation optimization implications for crop yield distribution modeling a critical issue in identifying an appropriate characterization of crop yield distributions is that the best fitting distribution in an in sample framework is not necessarily the best choice out of sample this study provides a methodology for estimating flexible and efficient mixture models using cross validation that alleviates many of these associated model selection issues the method is illustrated in an application to the rating of group risk insurance products results indicate that nonparametric models often fit best in sample but are inefficient and consistently overstate true rates and vice versa for parametric models the proposed model provides unbiased rates and also has desirable efficiency properties

food expenditure and involuntary retirement resolving the retirement consumption puzzle international research has shown that household expenditure on nondurables significantly decreases at retirement a finding that is inconsistent with the standard life cycle model of consumption if retirement is anticipated we analyze australian panel data and find that the decline in grocery and food expenditure is explained by households forced to retire earlier than planned due to a health event or job loss which represent unanticipated wealth shocks for most households retirement is anticipated and there is no decline in basic expenditures however for an important minority retirement is involuntary and these households experience a marked decline across the basic expenditure categories

spatial pattern of yield distributions implications for crop insurance crop insurance is similar to flood and hurricane insurance in that spatially correlated weather tends to cause violations of the independence assumption ideally one would seek to pool uncorrelated risk drawn from the same distribution in crop insurance this article proposes a testing procedure for the cross sectional pooling of group units and empirically analyzes whether the proposed test improves out of sample rating performance we utilize a balanced panel of u s county level corn yields for 510 counties and the results of an out of sample crop insurance rating performance exercise provide economic significance to the proposed pooling methodology and results

relaxing heteroscedasticity assumptions in area yield crop insurance rating this article focuses on the effect of differing heteroscedasticity assumptions on derived premium rates of area yield crop insurance tests of the proportional and absolute heteroscedasticity assumptions are conducted using both in sample and out of sample measures our results suggest that arbitrarily imposing a specific form of heteroscedasticity or homoscedasticity in insurance rate calculations limits actuarial soundness our results have practical implications for the federal crop insurance programs as we reject the traditional rating assumptions for many cotton regions and lower yielding higher risk corn and soybean counties but not in the heart of the cornbelt copyright 2011 oxford university press

is there a retirement consumption puzzle evidence using subjective retirement expectations abstract previous research finds a systematic decrease in consumption at retirement a finding that is inconsistent with the life cycle permanent income hypothesis if retirement is an expected event in this paper we use workers subjective beliefs about their retirement dates as an instrument for retirement after demonstrating that subjective retirement expectations are strong predictors of subsequent retirement decisions we still find a consumption decline at retirement for workers who retire when expected however our estimates of this consumption fall are about a third less than those found when we instead rely on the instrumental variables strategy used in prior studies

is there a retirement savings puzzle in this paper we ask whether households are saving enough for their retirement we use data on income expenditure and expenditure components to analyse patterns of behaviour at and around the time of retirement for successive date of birth cohorts we compare periods of unemployment to periods of retirement and separate expenditures into categories reflecting work related expenditures basic necessities and other goods we find that income typically falls by more at unemployment than retirement but the reverse is true for expenditure we observe falls in expenditure at retirement for all expenditure categories using a stochastic life cycle model including mortality rates we assess the anticipated impact of retirement on consumption against that of unemployment the inter relationship between goods and leisure explains a large part of the persistent fall in expenditure at retirement we argue that the only way in which the life cycle hypothesis could be reconciled with the remaining unanticipated dip in consumption would be with the systematic arrival of unexpected adverse information at the time of retirement