TY  - UNPD
A1  - Achury, Carolina
A1  - Hubar, Sylwia
A1  - Koulovatianos, Christos
T1  - Saving rates and portfolio choice with subsistence consumption
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2011,06
N2  - We analytically show that a common across rich/poor individuals Stone-Geary utility function with subsistence consumption in the context of a simple two-asset portfolio-choice model is capable of qualitatively and quantitatively explaining: (i) the higher saving rates of the rich, (ii) the higher fraction of personal wealth held in risky assets by the rich, and (iii) the higher volatility of consumption of the wealthier. On the contrary, time-variant “keeping-up-with-the-Joneses” weighted average consumption which plays the role of moving benchmark subsistence consumption gives the same portfolio composition and saving rates across the rich and the poor, failing to reconcile the model with what micro data say. JEL Classification: G11, D91, E21, D81, D14, D11
T3  - CFS working paper series - 2011, 06 
KW  - elasticity of intertemporal substitution
KW  - Stone-Geary preferences
KW  - two-asset portfolio
KW  - household portfolios
KW  - wealth inequality
Y1  - 2011
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/21081
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-92944
IS  - Version January 26, 2011
ER  -