Life insurance and household consumption

Jay Hong and José-Víctor Ríos-Rull
Authors registered in the RePEc Author Service: José-Víctor Ríos-Rull

No 04-10, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: In this paper, we use data of life insurance holdings by age, sex, and marital status to infer how individuals value consumption in different demographic stages. Essentially, we use revealed preference to estimate equivalence scales and altruism simultaneously in the context of a fully specified model with agents facing U.S. demographic features and with access to savings markets and life insurance markets. Our findings indicate that individuals are very caring for their dependents, that there are large economies of scale in consumption, that children are costly but wives with children produce a lot of goods in the home and that while females seem to have some form of habits created by marriage, men do not. These findings contrast sharply with the standard notions of equivalence scales.

Keywords: Insurance (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-dge
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Life Insurance and Household Consumption (2012)
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