Household Finance

Francisco Gomes, Michael Haliassos and Tarun Ramadorai

Journal of Economic Literature, 2021, vol. 59, issue 3, 919-1000

Abstract: Household financial decisions are complex, interdependent, and heterogeneous, and central to the functioning of the financial system. We present an overview of the rapidly expanding literature on household finance (with some important exceptions) and suggest directions for future research. We begin with the theory and empirics of asset market participation and asset allocation over the life cycle. We then discuss household choices in insurance markets, trading behavior, decisions on retirement saving, and financial choices by retirees. We survey research on liabilities, including mortgage choice, refinancing, and default, and household behavior in unsecured credit markets, including credit cards and payday lending. We then connect the household to its social environment, including peer effects, cultural and hereditary factors, intra-household financial decision-making, financial literacy, cognition, and educational interventions. We also discuss literature on the provision and consumption of financial advice.

JEL-codes: D15 G41 G50 J26 Z13 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Household Finance (2020)
Working Paper: Household finance (2020)
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DOI: 10.1257/jel.20201461

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