Why do household portfolio shares rise in wealth?
By: Jessica A. Wachter, Motohiro Yogo
Contributors: Yogo, Motohiro; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16316; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16316.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "We develop a life-cycle consumption and portfolio choice model in which households have nonhomothetic utility over two types of goods, basic and luxury.  We calibrate the model to match the cross-sectional and life-cycle variation in the basic expenditure share in the Consumer Expenditure Survey.  The model explains the degree to which the portfolio share in risky assets rises in wealth in the cross-section of households in the Survey of Consumer Finances.  For a given household, the portfolio share can fall in response to an increase in wealth, even though the model implies decreasing relative risk aversion"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 10/28/2010.

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