Replication data for: How Much Consumption Insurance beyond Self-Insurance?

Name	File Type	Size	Last Modified
AEJMacro-2009-0155			10/12/2019 09:00:PM
LICENSE.txt	text/plain	14.6 KB	10/12/2019 05:00:PM

Project Citation:

Kaplan, Greg, and Violante, Giovanni L. Replication data for: How Much Consumption Insurance beyond Self-Insurance? Nashville, TN: American Economic Association [publisher], 2010. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E114188V1

Project Description

Summary: We assess the degree of consumption smoothing implicit in a calibrated life-cycle version of the standard incomplete-markets model, and we compare it to the empirical estimates of Richard Blundell, Luigi Pistaferri, and Ian Preston (2008) (BPP hereafter) on US data. Households in the data have access to more consumption insurance against permanent earnings shocks than in the model. BPP estimate that 36 percent of permanent shocks are insurable, whereas the model's counterpart of the BPP estimator varies between 7 percent and 22 percent, depending on the tightness of debt limits. We also show that the BPP estimator has a downward bias that grows as borrowing limits become tighter. (JEL D31, D91, E21).

Scope of Project

JEL Classification:
      D31 Personal Income, Wealth, and Their Distributions
      D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
      E21 Macroeconomics: Consumption; Saving; Wealth

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V1 [2019-10-12]

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