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Housing and relative risk aversion

Abstract:
This paper derives closed-form and numerical solutions for relative risk aversion in a standard consumption-based model enriched with housing. The presence of housing enables the household to hedge against unexpected shocks and may decrease relative risk aversion. In addition, housing may generate state-dependent, time-varying risk aversion.
Publication status:
Published

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Publisher:
University of Oxford
Series:
Department of Economics Discussion Paper Series
Publication date:
2014-01-15
Paper number:
693


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Pubs id:
1143720
Local pid:
pubs:1143720
Deposit date:
2020-12-15

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