Journal of Economic Literature
no. 3, September 2021
Household financial decisions are complex, interdependent, and heterogeneous, and central to the functioning of the financial system. We present an overview of the rapidly
expanding literature on household finance (with some important exceptions) and suggest directions for future research. We begin with the theory and empirics of asset market
participation and asset allocation over the life cycle. We then discuss household choices in insurance markets, trading behavior, decisions on retirement saving, and financial choices
by retirees. We survey research on liabilities, including mortgage choice, refinancing, and default, and household behavior in unsecured credit markets, including credit cards and
payday lending. We then connect the household to its social environment, including peer effects, cultural and hereditary factors, intra-household financial decision-making, financial
literacy, cognition, and educational interventions. We also discuss literature on the provision and consumption of financial advice.
Gomes, Francisco, Michael Haliassos, and Tarun Ramadorai.
Journal of Economic Literature,
Intertemporal Household Choice; Life Cycle Models and Saving
Behavioral Finance: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets [Neurofinance]
Household Finance: General
Retirement; Retirement Policies
Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification