Until recently, researchers in economics and finance paid relatively little attention to household portfolios. Reasons included the tendency of most households to hold simple portfolios, the inability of the dominant asset pricing models to account for household portfolio incompleteness, and the lack of detailed databases on household portfolios in many countries until the late 1980s or 1990s. Now, however, the analysis of household portfolios is emerging as a field of vigorous study.
The eleven chapters in this collection provide an overview of current theoretical knowledge about the structure of household portfolios and compare predictions with empirical findings. The book describes the state-of-the-art tools of analytical, computational, and econometric investigation, as well as some of the key policy questions. It provides an original comparative analysis of household portfolios in countries for which detailed household-level data are available (the United States, the United Kingdom, Italy, Germany, and the Netherlands). Finally, it uses microdata for an in-depth study of the portfolio composition of population groups of special policy interest, such as the young, the elderly, and the rich.
About the Editors
Luigi Guiso is Professor of Economics at the European University Institute, Florence.
Michael Haliassos is Professor and Chair of Macroeconomics and Finance at Goethe University Frankfurt, Director of the Center for Financial Studies and of the Center of Excellence SAFE, and Research Fellow at the Center for Economic Policy Research (CEPR). He is a coeditor of Household Portfolios (MIT Press) and Stockholding in Europe.
Tullio Jappelli is Professor of Economics at the University of Salerno.
"This book is a must for anyone who is contemplating research in the area of household portfolio analysis. It lucidly covers theoretical and econometric issues, and also provides empirical results from careful studies done using data from a number of countries."
—Harvey Rosen, Department of Economics, Princeton University
"Household Portfolios provides comprehensive coverage of the theory of household-portfolio selection and a wealth of new information on household portfolio composition across demographic groups and countries. Skillfully edited by Guiso, Haliassos, and Jappelli, three major contributors in the field, the book is a must read for the serious student of the demand and pricing of capital assets and of pension and social security reform."
—George M. Constantinides, Leo Melamed Professor of Finance, University of Chicago
"The problem of household portfolio choice is both basic and complex. It is basic because it confronts any individual with more than minimal savings; it is complex because it involves issues at the frontier of finance theory, including horizon effects, uninsurable labor income risk, and taxation. The book reviews recent theoretical, computational, and econometric advances and applies them to data sets from several developed countries. It will be an extraordinarily valuable resource for researchers and students working on one of the most exciting topics in financial economics."
—John Y. Campbell, Department of Economics, Harvard University