Consumption and Precautionary Saving: An Empirical Analysis under Both Financial and Environmental Risks
Matteo Manera () and
No 115845, Climate Change and Sustainable Development from Fondazione Eni Enrico Mattei (FEEM)
This paper studies the empirical relationship between consumption and saving under two different sources of uncertainty: financial risk and environmental risk. The analysis is carried out using time series data for six advanced economies in the period 1965-2007. The results support the theoretical conclusions that both financial risk alone and the interaction between financial and environmental risks affect consumption. Moreover, we suggest a solution to some shortcomings which concern the empirical analysis performed with one-argument utility functions. Finally, we provide new estimates of indexes of relative risk aversion and relative prudence, and relative preference of environmental quality.
Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
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Journal Article: Consumption and precautionary saving: An empirical analysis under both financial and environmental risks (2013)
Working Paper: Consumption and Precautionary Saving: An Empirical Analysis under Both Financial and Environmental Risks (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemcl:115845
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