Heterogeneity in income processes

Sam Schulhofer-Wohl and Andriy Norets

No 999, 2009 Meeting Papers from Society for Economic Dynamics

Abstract: Macroeconomists are increasingly interested in heterogeneity in individuals' preferences and in the income risk that they face. Previous empirical papers have focused on only one or a few aspects of heterogeneity. In this paper, we estimate the entire joint distribution of risk preferences and income processes. Our model allows individual-specific trends, persistence and volatility of income and permits all of these characteristics to be correlated with the individual's risk preferences. We find substantial heterogeneity in all parameters of the income process. These findings potentially have substantial implications for the conclusions of microfounded macro models.

Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2009/paper_999.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed009:999

Access Statistics for this paper

More papers in 2009 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().