The main research question of this paper is whether or not the risk of family disruption has an impact on the consumption/saving decisions of households. Although little empirical work exists in this area, often presenting indirect evidence, the theory is divided over the effect of family risk over saving and wealth accumulation. By using data from the Italian Survey on Households Income and Wealth, we build a probabilistic model to assess the probability of marital splitting, and then we insert this probability as a distinct or interacted regressor, in a statistically consistent way, into a linear model of consumption. Furthermore, we study the differential behaviour, in terms of consumption/saving choices, of couples experiencing marital splitting over the subsequent 2 years. The main result of our analysis is that family disruption risk generates precautionary savings, reducing current consumption. In fact, according to our estimates, on average, the risk of divorce generates an amount of additional yearly precautionary savings of around 800 euros at constant prices of the year 2000, which represents 11% of overall household savings. © 2011 Springer Science+Business Media, LLC.

Family dissolution and precautionary savings. An empirical analysis / Pericoli, Filippo Maria; Ventura, Luigi. - In: REVIEW OF ECONOMICS OF THE HOUSEHOLD. - ISSN 1569-5239. - STAMPA. - 10:4(2012), pp. 573-595. [10.1007/s11150-011-9127-4]

Family dissolution and precautionary savings. An empirical analysis

Pericoli, Filippo Maria;Ventura, Luigi
2012

Abstract

The main research question of this paper is whether or not the risk of family disruption has an impact on the consumption/saving decisions of households. Although little empirical work exists in this area, often presenting indirect evidence, the theory is divided over the effect of family risk over saving and wealth accumulation. By using data from the Italian Survey on Households Income and Wealth, we build a probabilistic model to assess the probability of marital splitting, and then we insert this probability as a distinct or interacted regressor, in a statistically consistent way, into a linear model of consumption. Furthermore, we study the differential behaviour, in terms of consumption/saving choices, of couples experiencing marital splitting over the subsequent 2 years. The main result of our analysis is that family disruption risk generates precautionary savings, reducing current consumption. In fact, according to our estimates, on average, the risk of divorce generates an amount of additional yearly precautionary savings of around 800 euros at constant prices of the year 2000, which represents 11% of overall household savings. © 2011 Springer Science+Business Media, LLC.
2012
family disruption risk; family disruption risk precautionary savings risk sharing; precautionary savings; risk sharing
01 Pubblicazione su rivista::01a Articolo in rivista
Family dissolution and precautionary savings. An empirical analysis / Pericoli, Filippo Maria; Ventura, Luigi. - In: REVIEW OF ECONOMICS OF THE HOUSEHOLD. - ISSN 1569-5239. - STAMPA. - 10:4(2012), pp. 573-595. [10.1007/s11150-011-9127-4]
File allegati a questo prodotto
File Dimensione Formato  
Ventura_Family_2012.pdf

solo utenti autorizzati

Tipologia: Versione editoriale (versione pubblicata con il layout dell'editore)
Licenza: Tutti i diritti riservati (All rights reserved)
Dimensione 313.96 kB
Formato Adobe PDF
313.96 kB Adobe PDF   Contatta l'autore

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/535168
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 10
  • ???jsp.display-item.citation.isi??? 9
social impact