scholarly journals Full Information Estimation of Household Income Risk and Consumption Insurance

2017 ◽  
Author(s):  
Arpita Chatterjee ◽  
James Morley ◽  
Aarti Singh
Keyword(s):  
Household Income ◽  
Full Information ◽  
Income Risk ◽  
Consumption Insurance

scholarly journals Precautionary Savings, Illiquid Assets, and the Aggregate Consequences of Shocks to Household Income Risk

Econometrica ◽  
2019 ◽  
Vol 87 (1) ◽  
pp. 255-290 ◽  
Author(s):  
Christian Bayer ◽  
Ralph Luetticke ◽  
Lien Pham-Dao ◽  
Volker Tjaden
Keyword(s):  
Household Income ◽  
Precautionary Savings ◽  
Income Risk ◽  
Illiquid Assets

scholarly journals Tax Reform and Automatic Stabilization

2002 ◽  
Vol 92 (3) ◽  
pp. 411-433 ◽  
Author(s):  
Thomas J Kniesner ◽  
James P Ziliak
Keyword(s):  
Income Tax ◽  
Panel Study ◽  
Welfare Cost ◽  
Risk Averse ◽  
Income Dynamics ◽  
Income Risk ◽  
Tax Reforms ◽  
Automatic Stabilization ◽  
Consumption Insurance ◽  
Federal Income Tax

An income tax provides implicit insurance by dampening the variability of disposable income and consumption. Using an empirical framework derived from the consumption insurance literature and data from the Panel Study of Income Dynamics we examine the effect of federal income tax reforms of the 1980's on automatic stabilization of consumption. Overall, ERTA and TRA86 reduced consumption stability by about 50 percent. Recently increased EITC generosity restored or enhanced consumption insurance. The welfare cost of moving to the post-TRA86 system is sizable for relatively risk-averse households facing large income risk but is much more modest for the typical household.

SOCIAL SECURITY AND LONGEVITY RISK: THE CASE OF RISKY BEQUEST INCOME

2021 ◽  
pp. 1-32
Author(s):  
Erin N. Cottle Hunt ◽  
Frank N. Caliendo
Keyword(s):  
Social Security ◽  
Basic Question ◽  
Longevity Risk ◽  
Full Information ◽  
Conservative Estimate ◽  
Welfare Gains ◽  
Income Risk ◽  
Macroeconomic Models ◽  
Parents And Children ◽  
Do So

This paper quantifies the welfare gains from Social Security when individuals face uninsurable longevity risk. While past researchers have studied this basic question, we do so from a unique perspective. In contrast to traditional macroeconomic models that abstract from specific linkages between parents and children, in our model, children are born to specific parents whose longevity is uncertain. And because parental asset holdings evolve over the life of the parent, children face uninsurable bequest income risk in addition to their own longevity risk. We find that Social Security improves ex ante expected utility by 3.4% of lifetime consumption (for the second generation). Because our baseline analysis assumes full information and optimal hedging of longevity risk, we treat these welfare gains as a conservative estimate, and we show that the gains are significantly larger when individuals fail to hedge their longevity risk.

scholarly journals The Price of Growth: Consumption Insurance in China 1989–2009

2018 ◽  
Vol 10 (4) ◽  
pp. 1-35 ◽  
Author(s):  
Raül Santaeulàlia-Llopis ◽  
Yu Zheng
Keyword(s):  
Economic Growth ◽  
Growth Process ◽  
Income Shocks ◽  
Income Risk ◽  
Welfare Assessment ◽  
Household Level ◽  
Consumption Insurance ◽  
First Order ◽  
Income Data ◽  
Growing Economy

We exploit a novel and unique opportunity to document the transmission of income risk to consumption in a growing economy. Our laboratory is China, an economy that has witnessed enormous and sustained growth. We build a long panel of household-level consumption and income data. We find that consumption insurance deteriorates along the growth process with a transmission of permanent income shocks to consumption that at least triples from 1989 to 2009. Although preliminary, our welfare analysis suggests that the loss of consumption insurance can have first-order implications for the welfare assessment of economic growth. (JEL D12, E21, O12, O47, P24, P25, P36)

scholarly journals Consumption Insurance: An Evaluation of Risk-Bearing Systems in Low-Income Economies

1995 ◽  
Vol 9 (3) ◽  
pp. 83-102 ◽  
Author(s):  
Robert M Townsend
Keyword(s):  
Operating Systems ◽  
Low Income ◽  
Private Information ◽  
Risk Sharing ◽  
Statistical Tests ◽  
Low Income Countries ◽  
Full Information ◽  
Theoretical Discussion ◽  
Financial Systems ◽  
Consumption Insurance

The hypothesis of full risk sharing can be taken to data from low-income countries and evaluate formal and informal financial systems. In many contexts, idiosyncratic risks are high, so credit/insurance arrangements could be beneficial. Statistical tests reveal that households in southern India take advantage of these possibilities; villages in Cote d'Ivoire and countries in Thailand do not do as well. The paper includes an empirical description of the devices used to smooth consumption and a theoretical discussion of private information and incentives on ideal operating systems. The full information and mechanism design frameworks provide benchmarks for policy analysis.

Computer-Controlled Hrem Alignment Using Automated Diffractogram Analysis

1990 ◽  
Vol 48 (1) ◽  
pp. 532-533
Author(s):  
G.Y. Fan ◽  
O.L. Krivanek
Keyword(s):  
Electron Microscope ◽  
High Resolution ◽  
The Other ◽  
Full Information ◽  
Resolution Electron ◽  
Skilled Operator ◽  
Automatic Alignment ◽  
High Resolution Electron Microscope ◽  
Computer Controlled ◽  
Recorded Image

Full alignment of a high resolution electron microscope (HREM) requires five parameters to be optimized: the illumination angle (beam tilt) x and y, defocus, and astigmatism magnitude and orientation. Because neither voltage nor current centering lead to the correct illumination angle, all the adjustments must be done on the basis of observing contrast changes in a recorded image. The full alignment can be carried out by a computer which is connected to a suitable image pick-up device and is able to control the microscope, sometimes with greater precision and speed than even a skilled operator can achieve. Two approaches to computer-controlled (automatic) alignment have been investigated. The first is based on measuring the dependence of the overall contrast in the image of a thin amorphous specimen on the relevant parameters, the other on measuring the image shift. Here we report on our progress in developing a new method, which makes use of the full information contained in a computed diffractogram.

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