We examine respondents in the Health and Retirement Study (HRS) to observe how their financial situations unfolded as they aged. We focus on low income older adults and follow them over time to identify the factors associated with having low income at baseline and thereafter. We find that (a) real income remained relatively stable as individuals approach and enter retirement, and progress through their retirement years, and (b) labor force participation declined and thus earnings became less important with age, while Social Security and retirement savings rose as a proportion of annual income.
{"title":"Income Trajectories in Later Life: Longitudinal Evidence from the Health and Retirement Study","authors":"Olivia S. Mitchell, Robert L. Clark, A. Lusardi","doi":"10.3386/W28721","DOIUrl":"https://doi.org/10.3386/W28721","url":null,"abstract":"We examine respondents in the Health and Retirement Study (HRS) to observe how their financial situations unfolded as they aged. We focus on low income older adults and follow them over time to identify the factors associated with having low income at baseline and thereafter. We find that (a) real income remained relatively stable as individuals approach and enter retirement, and progress through their retirement years, and (b) labor force participation declined and thus earnings became less important with age, while Social Security and retirement savings rose as a proportion of annual income.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"60 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125633895","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}
Why do Japanese households hold so few stocks? We use a quantitative life-cycle portfolio choice model to argue in favour of two main explanations. First, households have a very low level of trust in the stock market due to Japan's history of poor corporate governance. Second, stock returns to individual stockholders have been low. Before 1990, this was due to excessive fees and commissions. Since the 1990 financial crisis, the Japanese market itself has delivered low and volatile returns. Counterfactual analysis suggests that, if sustained, recent improvements in corporate governance and economic performance should lead to higher stock market participation.
{"title":"Understanding Japanese Household Portfolios","authors":"Kosuke Aoki, Alexander Michaelides, Kalin Nikolov","doi":"10.2139/ssrn.3832657","DOIUrl":"https://doi.org/10.2139/ssrn.3832657","url":null,"abstract":"Why do Japanese households hold so few stocks? We use a quantitative<br>life-cycle portfolio choice model to argue in favour of two main explanations.<br>First, households have a very low level of trust in the stock market due to<br>Japan's history of poor corporate governance. Second, stock returns to<br>individual stockholders have been low. Before 1990, this was due to excessive<br>fees and commissions. Since the 1990 financial crisis, the Japanese market<br>itself has delivered low and volatile returns. Counterfactual analysis<br>suggests that, if sustained, recent improvements in corporate governance and<br>economic performance should lead to higher stock market participation.<br>","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"76 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121090868","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}
We utilize a unique data from the recent wave of Survey of Consumer Finance 2019 to analyze the portfolio choice of a new and raising asset class: cryptocurrency. Specifically, we study who owns crypto and why? We first analyze how key households’ demographic (age, gender, race, etc.) and household’s traits/preferences (time horizon, financial literacy, optimism, etc.) influence crypto ownership. We find that crypto owners are more of college white male; with generational gap as mostly millennials. Moreover, they are financially literate; social; pessimistic; with longer time horizon and employ high research when investing. We then turn to study the relationship between crypto asset class with other asset classes (stock equity, bonds, home and business), and find that only direct holding of stocks increase the propensity to own crypto, while other asset classes negatively influence the likelihood to own crypto. We then zoomed in this subgroup of direct stockholders to draw inference on their portfolio properties that impact crypto ownership, and find that these investors consider crypto asset class to be a part of portfolio diversity. Furthermore, we analyze what are the key motives for investing in crypto and find that consumption smoothing and hedging against rainy days and emergencies are the key motives to invest crypto, while retirement motive has no impact. Collectively, we are able to profile crypto owners, who exhibit a unique personality and call them as gentleman investors: social, intensively search, less overconfident, less claiming financial knowledge and financially literate.
{"title":"On the Portfolio Choice of Crypto Asset Class: Meet the Gentlemen Investors","authors":"Yosef Bonaparte","doi":"10.2139/ssrn.3829275","DOIUrl":"https://doi.org/10.2139/ssrn.3829275","url":null,"abstract":"We utilize a unique data from the recent wave of Survey of Consumer Finance 2019 to analyze the portfolio choice of a new and raising asset class: cryptocurrency. Specifically, we study who owns crypto and why? We first analyze how key households’ demographic (age, gender, race, etc.) and household’s traits/preferences (time horizon, financial literacy, optimism, etc.) influence crypto ownership. We find that crypto owners are more of college white male; with generational gap as mostly millennials. Moreover, they are financially literate; social; pessimistic; with longer time horizon and employ high research when investing. We then turn to study the relationship between crypto asset class with other asset classes (stock equity, bonds, home and business), and find that only direct holding of stocks increase the propensity to own crypto, while other asset classes negatively influence the likelihood to own crypto. We then zoomed in this subgroup of direct stockholders to draw inference on their portfolio properties that impact crypto ownership, and find that these investors consider crypto asset class to be a part of portfolio diversity. Furthermore, we analyze what are the key motives for investing in crypto and find that consumption smoothing and hedging against rainy days and emergencies are the key motives to invest crypto, while retirement motive has no impact. Collectively, we are able to profile crypto owners, who exhibit a unique personality and call them as gentleman investors: social, intensively search, less overconfident, less claiming financial knowledge and financially literate.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114512907","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}
Life span uncertainty (longevity risk) impacts several economic decisions. Individuals can form and revise their survival beliefs making use of behavioural heuristics. We propose a model of sentiment, in which individuals are assumed to switch between optimistic and pessimistic expectations on their health. When optimism is persistent in the face of health shocks, or when individuals are more likely to change their sentiment from pessimistic to optimistic than otherwise, our model predicts survival under-estimation at young ages and over-estimation at old ages. An empirical analysis based on the longitudinal data from the Health and Retirement Study (HRS) validates our model.
{"title":"A Behavioural Gap in Survival Beliefs","authors":"Giovanna Apicella, Enrico G. De Giorgi","doi":"10.2139/ssrn.3821595","DOIUrl":"https://doi.org/10.2139/ssrn.3821595","url":null,"abstract":"Life span uncertainty (longevity risk) impacts several economic decisions. Individuals can form and revise their survival beliefs making use of behavioural heuristics. We propose a model of sentiment, in which individuals are assumed to switch between optimistic and pessimistic expectations on their health. When optimism is persistent in the face of health shocks, or when individuals are more likely to change their sentiment from pessimistic to optimistic than otherwise, our model predicts survival under-estimation at young ages and over-estimation at old ages. An empirical analysis based on the longitudinal data from the Health and Retirement Study (HRS) validates our model.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"95 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126144597","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}
This paper studies the large concentration of retirement behavior around statutory retirement ages, a puzzling stylized fact. To investigate this fact, I estimate bunching responses to 644 pension benefit discontinuities, using administrative data on the universe of German retirees. Financial incentives alone cannot explain retirement patterns, but there is a large direct effect of statutory retirement ages. I argue that the framing of statutory ages as reference points for retirement provides a plausible explanation. Simulations based on a model with reference dependence highlight that shifting statutory ages via pension reforms is an effective policy to influence retirement behavior. (JEL D91, H55, J26, J32)
{"title":"Reference Points for Retirement Behavior: Evidence from German Pension Discontinuities","authors":"Arthur Seibold","doi":"10.1257/AER.20191136","DOIUrl":"https://doi.org/10.1257/AER.20191136","url":null,"abstract":"This paper studies the large concentration of retirement behavior around statutory retirement ages, a puzzling stylized fact. To investigate this fact, I estimate bunching responses to 644 pension benefit discontinuities, using administrative data on the universe of German retirees. Financial incentives alone cannot explain retirement patterns, but there is a large direct effect of statutory retirement ages. I argue that the framing of statutory ages as reference points for retirement provides a plausible explanation. Simulations based on a model with reference dependence highlight that shifting statutory ages via pension reforms is an effective policy to influence retirement behavior. (JEL D91, H55, J26, J32)","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115971939","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}
This paper studies the effects of imperfect risk-sharing between lenders and borrowers on commercial property prices and leverage. The key friction is that agents use different discount rates to evaluate future flows. Eliminating this pecuniary externality generates large reductions in the volatility of real estate prices and credit. Therefore, policies that enhance risk-sharing between lenders and borrowers reduce the magnitude of boom-bust cycles in real estate prices. We also introduce health shocks to study the effect of the COVID-19 crisis on the commercial property market.
{"title":"Leveraged Property Cycles","authors":"I. Jaccard","doi":"10.2139/ssrn.3832773","DOIUrl":"https://doi.org/10.2139/ssrn.3832773","url":null,"abstract":"This paper studies the effects of imperfect risk-sharing between lenders and borrowers on commercial property prices and leverage. The key friction is that agents use different discount rates to evaluate future flows. Eliminating this pecuniary externality generates large reductions in the volatility of real estate prices and credit. Therefore, policies that enhance risk-sharing between lenders and borrowers reduce the magnitude of boom-bust cycles in real estate prices. We also introduce health shocks to study the effect of the COVID-19 crisis on the commercial property market.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134192580","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}
Chi Heem Wong, Dexin Li, Nina Wang, J. Gruber, R. Conti, A. Lo
We empirically assess the potential financial impact of future gene therapies on the US economy. After identifying 109 late-stage gene therapy clinical trials currently underway, we estimate the number of new and existing patients with corresponding diseases to be treated by these gene therapies, developing and applying novel mathematical models to estimate the increase in quality-adjusted life years for each approved gene therapy. We then simulate the launch prices and the expected spending for these therapies over a 15-year time horizon. Under conservative assumptions, the results of our simulation suggest that an expected total of 1.09 million patients will be treated by gene therapy from January 2020 to December 2034. The expected peak annual spending on these therapies is $25.3 billion, and the expected total spending from January 2020 to December 2034 is $306 billion. Assuming a linear pace of future gene therapy development fitted to past experience, our spending estimate increases by only 15.7% under conservative assumptions. As a proxy for the impact of expected spending on different public and private payers, we decompose the estimated annual spending by treated age group. Since experience suggests that insurers with annual budget constraints may restrict access to therapies with expected benefit to the patient, we consider various methods of payment to ensure access to these therapies even among those insured by the most budget-constrained payers.
Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
{"title":"Estimating the Financial Impact of Gene Therapy in the U.S","authors":"Chi Heem Wong, Dexin Li, Nina Wang, J. Gruber, R. Conti, A. Lo","doi":"10.3386/W28628","DOIUrl":"https://doi.org/10.3386/W28628","url":null,"abstract":"We empirically assess the potential financial impact of future gene therapies on the US economy. After identifying 109 late-stage gene therapy clinical trials currently underway, we estimate the number of new and existing patients with corresponding diseases to be treated by these gene therapies, developing and applying novel mathematical models to estimate the increase in quality-adjusted life years for each approved gene therapy. We then simulate the launch prices and the expected spending for these therapies over a 15-year time horizon. Under conservative assumptions, the results of our simulation suggest that an expected total of 1.09 million patients will be treated by gene therapy from January 2020 to December 2034. The expected peak annual spending on these therapies is $25.3 billion, and the expected total spending from January 2020 to December 2034 is $306 billion. Assuming a linear pace of future gene therapy development fitted to past experience, our spending estimate increases by only 15.7% under conservative assumptions. As a proxy for the impact of expected spending on different public and private payers, we decompose the estimated annual spending by treated age group. Since experience suggests that insurers with annual budget constraints may restrict access to therapies with expected benefit to the patient, we consider various methods of payment to ensure access to these therapies even among those insured by the most budget-constrained payers.<br><br>Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at <a href=\"http://www.nber.org/papers/w28628\" TARGET=\"_blank\">www.nber.org</a>.<br>","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"69 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125941370","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}
Ownership of a unique and legal identity is crucial for financial inclusion in Uganda as majority of financial service providers demand a national identity (ID) to satisfy the KYC (Know your customer) requirements. This study attempts to examine the effect of ownership of a national ID on financial inclusion in Uganda. The study utilizes the 2017 World Bank Global Findex data and finds that national ID ownership is statistically significant in predicting the likelihood of being financially included in Uganda. With 95% confidence, national ID ownership, phone ownership, education, income quintile, and employment status significantly predict the likelihood of being financially included in Uganda. The study further reveals that an individual who owns a national ID and owns a phone, has secondary school education, is in the richest 20% income quintile, and is in the workforce is more likely to be financially included compared to the same individual without a national ID although the result is not statistically significant. Generally, the study argues that Uganda can boost financial inclusion by harnessing ID ownership among the financially excluded. The study recommends that national ID ownership policies should be integrated with other policies such as human capital development, income equality, employment, and increasing phone ownership in order to achieve efficient outcomes.
{"title":"National Identity Ownership and Financial Inclusion in Uganda","authors":"Festo Nyende Tusubira, Cynthia Mbabazi","doi":"10.2139/ssrn.3814172","DOIUrl":"https://doi.org/10.2139/ssrn.3814172","url":null,"abstract":"Ownership of a unique and legal identity is crucial for financial inclusion in Uganda as majority of financial service providers demand a national identity (ID) to satisfy the KYC (Know your customer) requirements. This study attempts to examine the effect of ownership of a national ID on financial inclusion in Uganda. The study utilizes the 2017 World Bank Global Findex data and finds that national ID ownership is statistically significant in predicting the likelihood of being financially included in Uganda. With 95% confidence, national ID ownership, phone ownership, education, income quintile, and employment status significantly predict the likelihood of being financially included in Uganda. The study further reveals that an individual who owns a national ID and owns a phone, has secondary school education, is in the richest 20% income quintile, and is in the workforce is more likely to be financially included compared to the same individual without a national ID although the result is not statistically significant. Generally, the study argues that Uganda can boost financial inclusion by harnessing ID ownership among the financially excluded. The study recommends that national ID ownership policies should be integrated with other policies such as human capital development, income equality, employment, and increasing phone ownership in order to achieve efficient outcomes.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-03-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122546569","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}
W. Goetzmann, C. Spaenjers, Stijn Van Nieuwerburgh
Real and private-value assets—defined here as the sum of real estate, infrastructure, collectibles, and noncorporate business equity—compose an investment class worth an estimated $$$84 trillion in the U.S. alone. Furthermore, private values can affect pricing in many other financial markets, such as that for sustainable investments. This paper introduces the research on real assets and private values that can be found in this special issue. It also reviews recent advances and highlights new research directions on a number of topics in the real assets space that we believe to be particularly important and exciting.
{"title":"Real and Private-Value Assets","authors":"W. Goetzmann, C. Spaenjers, Stijn Van Nieuwerburgh","doi":"10.2139/ssrn.3803091","DOIUrl":"https://doi.org/10.2139/ssrn.3803091","url":null,"abstract":"\u0000 Real and private-value assets—defined here as the sum of real estate, infrastructure, collectibles, and noncorporate business equity—compose an investment class worth an estimated $$$84 trillion in the U.S. alone. Furthermore, private values can affect pricing in many other financial markets, such as that for sustainable investments. This paper introduces the research on real assets and private values that can be found in this special issue. It also reviews recent advances and highlights new research directions on a number of topics in the real assets space that we believe to be particularly important and exciting.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-03-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121459972","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}
This paper studies the spillover effect of home mortgage delinquencies using a discrete-choice spatial network model. In our empirical study, a main challenge in estimating this model is that mortgage repayment decisions can only be observed for a sample of all the borrowers in the study region. We show that the nested pseudolikelihood (NPL) algorithm can be readily modified to accommodate this missing data issue. Monte Carlo simulations indicate that the proposed estimator works well in finite samples and ignoring this issue leads to a downward bias in the estimated spillover effect. We estimate the model using data on single-family residential mortgage delinquencies in Clark County of Nevada in 2010, and find strong evidence of spillover effects. We also conduct some counterfactual experiments to illustrate the policy relevance of the spillover effect.
{"title":"Estimation of Spillover Effects in Home Mortgage Delinquencies with Sampled Loan Performance Data","authors":"Hua Kiefer, Denghui Chen, Xiaodong Liu","doi":"10.2139/ssrn.3901990","DOIUrl":"https://doi.org/10.2139/ssrn.3901990","url":null,"abstract":"This paper studies the spillover effect of home mortgage delinquencies using a discrete-choice spatial network model. In our empirical study, a main challenge in estimating this model is that mortgage repayment decisions can only be observed for a sample of all the borrowers in the study region. We show that the nested pseudolikelihood (NPL) algorithm can be readily modified to accommodate this missing data issue. Monte Carlo simulations indicate that the proposed estimator works well in finite samples and ignoring this issue leads to a downward bias in the estimated spillover effect. We estimate the model using data on single-family residential mortgage delinquencies in Clark County of Nevada in 2010, and find strong evidence of spillover effects. We also conduct some counterfactual experiments to illustrate the policy relevance of the spillover effect.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-03-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121948905","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}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：