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Buffer-stock savings and households' wealth response to income shocks

Winfried Koeniger, Giulio Fella and Serafin Frache

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: We structurally estimate a buffer-stock savings model using panel data from the Italian Survey of Household Income and Wealth that contains information not only about income and consumption but also wealth. We exploit the information about wealth and the responses of wealth and consumption to income shocks over different time horizons to infer the degree of insurance against permanent and transitory income shocks. The estimated model implies that Italian households can insure 5-10% of a permanent shock and 90-95% of a transitory shock. The degree of insurance against permanent shocks is at the low end of the range of existing estimates for the U.S.

JEL-codes: D91 E20 E21 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-mac
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https://www.econstor.eu/bitstream/10419/145507/1/VfS_2016_pid_6305.pdf (application/pdf)

Related works:
Working Paper: Buffer-stock saving and households' response to income shocks (2016) Downloads
Working Paper: Buffer-Stock Saving and Households' Response to Income Shocks (2016) Downloads
Working Paper: Buffer-Stock Saving and Households' Response to Income Shocks (2016) Downloads
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