Risk sharing by households within and across regions and industries

Gregory D. Hess, Kwanho Shin

Research output: Contribution to journalArticle

11 Citations (Scopus)

Abstract

Cochrane (1991, Journal of Political Economy 99, 957-976) and Mace (1991, Journal of Political Economy 99, 928-956) test if risk sharing across households is complete in the sense that household consumption moves one-for-one with aggregate consumption. In their studies the source of income risk is idiosyncratic, and agents can share risk across the entire economy. Using a sample of households from the Panel Study on Income Dynamics (PSID), we explore whether households share the risk associated with their industries and regions across households in other regions and industries. We find that a large fraction of risk faced by households is not shared across regions and industries.

Original languageEnglish
Pages (from-to)533-560
Number of pages28
JournalJournal of Monetary Economics
Volume45
Issue number3
Publication statusPublished - 2000 Jun 1

Fingerprint

Industry
Household
Risk sharing
Political economy
Income
Income risk
Aggregate consumption
Panel study
Household consumption

Keywords

  • E21
  • Quantity anomaly
  • Risk sharing

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance

Cite this

Risk sharing by households within and across regions and industries. / Hess, Gregory D.; Shin, Kwanho.

In: Journal of Monetary Economics, Vol. 45, No. 3, 01.06.2000, p. 533-560.

Research output: Contribution to journalArticle

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