Chapter One Introduction 1
Chapter Two Literature Review 9
2.1 Theoretical Analysis 10
2.2 Recent Empirical Evidence 17
Chapter Three Uncapitalized Future Income 22
3.1 Introduction 22
3.2 A Two-period Model and the Main Finding 34
3.3 An Infinite Horizon Model 43
3.4 Discussion 49
Appendix 51
Chapter Four Inferring Risk Aversion Using One Portfolio Decision 60
4.1 Introduction 60
4.2 Inferring Risk Aversion in the Small 66
4.3 Inferring Risk Aversion in the Large 70
4.4 Inferring Risk Aversion in the Large Using Functional Forms for Utility 76
4.5 Numerical Solutions 83
4.6 Conclusion 88
Chapter Five Reinterpretation of Recent Empirical Evidence 93
5.1 Introduction 93
5.2 Friend and Blume(1975) 99
5.3 Chiappori and Paiella(2011) 105
5.4 Brunnermeier and Nagel(2008) 111
5.5 Summary and Discussion 118
References 121
Postscript 128