Essays in household finance
<p>This thesis contains three essays on household finance focusing on household consumption and savings decisions. The first paper studies household demand for flexibility in debt repayment. Based on evidence from a natural experiment, I find that few households apply for flexibility in debt r...
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| Format: | Thesis |
| Language: | English |
| Published: |
2020
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| Summary: | <p>This thesis contains three essays on household finance focusing on household consumption and
savings decisions. The first paper studies household demand for flexibility in debt repayment.
Based on evidence from a natural experiment, I find that few households apply for flexibility in
debt repayment, although all households weakly prefer flexibility in a standard consumption-
savings model. The paper studies how self-control problems and a desire for commitment, as
well as inattention and inertia can explain observed household behavior. The second paper
untangles reasons for the credit card debt puzzle describing the co-holding of high-cost debt and
low-yield assets. I test existing theories for co-holding and provide evidence on the contribution
to co-holding of intra-household financial pooling and of anchoring to minimum credit card
payments. The final paper studies household heterogeneity in insuring against cohort-level
earnings shocks using: (i) investment income flows; (ii) the tax-and-transfer-system; and (iii)
credit markets. The insurance mechanisms vary by household socio-economic characteristics
captured by housing tenure.</p> |
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