Read Books Online and Download eBooks, EPub, PDF, Mobi, Kindle, Text Full Free.
Download Human Capital Risk And Portfolio Choice full books in PDF, epub, and Kindle. Read online Human Capital Risk And Portfolio Choice ebook anywhere anytime directly on your device. Fast Download speed and no annoying ads. We cannot guarantee that every ebooks is available!
Author : Ann Lombardi
Publisher :
ISBN 13 :
Total Pages : 402 pages
Book Rating : 4.:/5 (561 download)
Download or read book Human Capital Risk and Portfolio Choice written by Ann Lombardi and published by . This book was released on 2003 with total page 402 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Zuliu Hu
Publisher : International Monetary Fund
ISBN 13 : 1451947429
Total Pages : 22 pages
Book Rating : 4.4/5 (519 download)
Download or read book Risk-Taking and Optimal Taxation with Nontradable Human Capital written by Zuliu Hu and published by International Monetary Fund. This book was released on 1992-12-01 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: What are the effects of taxation on individual/entrepreneurs’ risk-taking behavior? This paper re-examines this old question in a continuous time life-cycle model. We demonstrate that the stream of uncertain income from human capital has systematic effects on demand for the risky physical capital asset. If labor supply is inelastic and real wages are known with certainty, then a labor income tax will reduce holdings of the risky physical asset. However, if there are random fluctuations in labor income, then the effect depends on the nature of interaction between wage risk and investment income risk. A labor income tax may actually raise demand for the risky capital asset if human capital risk and physical capital risk are positively correlated. The idiosyncratic risk and nontradability of human capital also have implications for optimal taxation. When the insurance and disincentive effects are jointly taken into account, a Pareto efficient tax structure implies a strictly positive tax rate.
Author : Philippe D'Astous
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (133 download)
Download or read book Human Capital Risk and Portfolio Choices written by Philippe D'Astous and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Sara B. Holland
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (139 download)
Download or read book What Drives the Correlations Between Human and Financial Capital Returns? An International Portfolio Choice Approach written by Sara B. Holland and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Over a time of increased economic stability, human capital returns have become riskier. Income volatility is increasing, workers bear more risk in labor markets, and global trends in trade and investment expose human capital to risks from a more internationally integrated economy. But measuring the risk and returns of human capital presents distinct challenges. We estimate the correlation between returns to human capital and financial returns implied by observable international portfolio holdings, financial returns data, and a portfolio choice model. Implied correlations vary across countries and time, and are related to education, immigration, trade, and direct investment. Countrylevel characteristics associated with globally integrated labor markets drive the integration between human and financial capital. For example, the positive association of inward FDI with the correlation between home human capital and foreign financial returns suggests that when foreign firms generate wages, human capital returns are more highly correlated with foreign financial returns.
Author : Kartik Athreya
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)
Download or read book Stock Market Investment written by Kartik Athreya and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Portfolio choice models counter factually predict (or advise) almost universal equity market participation and a high share for equity in wealth early in life. Empirically consistent predictions have proved elusive without participation costs, informational frictions, or non standard preferences. We demonstrate that once human capital investment is allowed, standard theory predicts portfolio choices much closer to those empirically observed. Two intuitive mechanisms are at work: For participation, human capital returns exceed financial asset returns for most young households and, as households age, this is reversed. For shares, risks to human capital limit the household's desire to hold wealth in risky financial equity.
Author : Ingmar Minderhoud
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book The Impact of Human Capital on Life-Cycle Portfolio Choice written by Ingmar Minderhoud and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the impact of human capital on life-cycle portfolio choice using Dutch data. A distinction is made between the riskless view of human capital as having bond-like characteristics, and the risky conception of future wage income having stock-like properties. As in Benzoni, Collin-Dufresne, and Goldstein (2007) we study the welfare implications of portfolio choice when wage income and dividends are co-integrated. Based on Dutch data our analysis confirms the US results as the preferred equity allocation also shows a hump-shaped pattern.
Author : Kyung Hwan Shim
Publisher :
ISBN 13 :
Total Pages : 61 pages
Book Rating : 4.:/5 (13 download)
Download or read book Human Capital and Household Portfolio Choice written by Kyung Hwan Shim and published by . This book was released on 2015 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using longitudinal data from PSID, we show the positive relation between labor income and the equity share of financial wealth is stronger for those who have a higher persistence in shocks to permanent labor income. The results support the hypothesis that the cross sectional variation in persistence captures latent human capital effects on investment decisions, without which the variation in equity share appears to be attributed to variation in financial wealth. The predictions, which are supported empirically, are formulated with a simple model and a realistically calibrated life-cycle model of consumption and portfolio choice with non-tradeable human capital.
Author : Pedro Silos
Publisher :
ISBN 13 :
Total Pages : 50 pages
Book Rating : 4.:/5 (13 download)
Download or read book Human Capital Portfolios written by Pedro Silos and published by . This book was released on 2014 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper assesses the trade-off between acquiring specialized skills targeted for a particular occupation and acquiring a package of skills that diversifies risk across occupations. Individual-level data on college credits across subjects and labor-market dynamics reveal that diversification generates higher income growth for individuals who switch occupations whereas specialization benefits those who stick with one type of job. A human capital portfolio choice problem featuring skills, abilities, and uncertain labor outcomes replicates this general pattern and generate a sizable amount of inequality. Policy experiments illustrate that forced specialization generates lower average income growth and lower turnover, but also lower inequality.
Author : Isaac Ehrlich
Publisher :
ISBN 13 :
Total Pages : 76 pages
Book Rating : 4.E/5 ( download)
Download or read book Asset Management, Human Capital, and the Market for Risky Assets written by Isaac Ehrlich and published by . This book was released on 2008 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: Risky-asset prices are conventionally modeled as "fully (information-) revealing". Much less work has been done on how prices get to reveal information. Following the "noisy-prices", rational-expectations approach, our answer focuses on the micro-foundations of information acquisition and the role of human capital in asset, or risk, management. We derive testable propositions on how education and other determinants of asset management affect its intensity, risky-asset demand, and portfolio returns. We derive related insights concerning determinants of the level and volatility of asset prices and equity premiums. Using micro-level data on portfolio choices, we find that education raises both the portfolio share of risky assets and overall portfolio returns, while a measure of the opportunity cost of asset management has the opposite effects. Our results indicate a non-trivial return to education in generating non-wage income. They suggest that educational attainments directly affect the distribution of income as well as earnings.
Author : Zvi Bodie
Publisher :
ISBN 13 :
Total Pages : 52 pages
Book Rating : 4.3/5 ( download)
Download or read book Labor Supply Flexibility and Portfolio Choice written by Zvi Bodie and published by . This book was released on 1989 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a model showing that people who have flexibility in choosing how much to work will prefer to invest substantially more of their money in risky assets than if they had no such flexibility. Viewed in this way, labor supply flexibility offers insurance against adverse investment outcomes. The model provides support for the conventional wisdom that the young can tolerate more risk in their investment portfolios than the old. The model has other implications for the study of household financial behavior over the life cycle. It implies that households will take account of the value of labor supply flexibility in deciding how much to invest in their own human capital and when to retire. At the macro level it implies that people will have a labor supply response to shocks in the financial markets.
Author : Thomas E. MaCurdy
Publisher :
ISBN 13 :
Total Pages : 66 pages
Book Rating : 4.:/5 (195 download)
Download or read book An Intertemporal Model of Portfolio Choice and Human Capital Accumulation Under Uncertainty with Extensions Incorporating Taxes, Consumer Durables, Imperfections in Capital Markets, and Nonseparable Preferences written by Thomas E. MaCurdy and published by . This book was released on 1981 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Moshe A. Milevsky Ph.D.
Publisher : FT Press
ISBN 13 : 0133115321
Total Pages : 282 pages
Book Rating : 4.1/5 (331 download)
Download or read book Are You a Stock or a Bond? written by Moshe A. Milevsky Ph.D. and published by FT Press. This book was released on 2012-09-21 with total page 282 pages. Available in PDF, EPUB and Kindle. Book excerpt: You must be aware of the value, potential return and risk of your own human capital (your job, career and what you do for a living as opposed to stocks and bonds or other investment choices) as well as financial capital and investments to plan a secure future. Human capital is the most valuable asset that you will own over your lifecycle. You need to balance all financial decisions with the characteristics of your human capital. The key trends identified in the first edition of the book namely, the decline of Defined Benefit (DB) pension provision, the continued increase in human longevity and the risk of personal inflation, are as relevant today as they were five years ago. The financial crisis has taught us that all types of capital – human, financial and even social – are key to a secure financial future. If your career has "stock-like" growth and risk characteristics, Milevsky helps you balance your "portfolio" by tilting investments towards safer "bonds." If your job is more secure but offers lower financial upside, you'll learn to tilt your investments towards stocks that compensate for your lower earning potential. Either way, Milevsky shows you how to integrate investments, insurance, annuities, and retirement plans to generate the safe and reliable income you'll need. This Edition's updates include: New 2012 data, charts, figures, and references More coverage of incorporating "human capital" into financial planning Advice reflecting the aftermath of the financial crisis Easier, more usable techniques, and less math!
Author : Luca Benzoni
Publisher :
ISBN 13 :
Total Pages : 49 pages
Book Rating : 4.:/5 (255 download)
Download or read book Portfolio Choice Over the Life-cycle in the Presence of 'trickle Down' Labor Income written by Luca Benzoni and published by . This book was released on 2005 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: Empirical evidence shows that changes in aggregate labor income and stock market returns exhibit only weak correlation at short horizons. As we document below, however, this correlation increases substantially at longer horizons, which provides at least suggestive evidence that stock returns and labor income are cointegrated. In this paper, we investigate the implications of such a cointegrated relation for life-cycle optimal portfolio and consumption decisions of an agent whose non-tradable labor income faces permanent and temporary idiosyncratic shocks. We find that, under economically plausible calibrations, the optimal portfolio choice for the young investor is to take a substantial ¿Xem short} position in the risky portfolio, in spite of the large risk premium associated with it. Intuitively, this occurs because the cointegration effect makes the present value of future labor income flows stock-like' for the young agent. However, for older agents who have shorter times-to-retirement, the cointegration effect does not have sufficient time to act, and the remaining human capital becomes more bond-like.' Together, these effects create a hump-shaped optimal portfolio decision for the agent over the life cycle, consistent with empirical observation
Author : Glenn Boyle
Publisher :
ISBN 13 :
Total Pages : 14 pages
Book Rating : 4.:/5 (129 download)
Download or read book Human Capital and Popular Investment Advice written by Glenn Boyle and published by . This book was released on 2004 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt: Popular investment advice recommends that the stock/bond and stock/wealth ratios should rise with investor risk tolerance and investment horizon respectively, prescriptions that are difficult to reconcile with standard models of portfolio choice. Canner et al. (1997) point out that the first piece of advice can potentially be explained by human capital considerations, but only by invalidating the second piece of advice. We show that extending the mean-variance model to include human capital can simultaneously justify both recommendations, so long as the correlation between human capital returns and stock market returns lies within a range determined by market and investor-specific parameters. Historical data from 11 countries generally satisfy this requirement, although the statistical precision of our estimates is fairly weak.
Author : John Y. Campbell
Publisher : OUP Oxford
ISBN 13 : 019160691X
Total Pages : 272 pages
Book Rating : 4.1/5 (916 download)
Download or read book Strategic Asset Allocation written by John Y. Campbell and published by OUP Oxford. This book was released on 2002-01-03 with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt: Academic finance has had a remarkable impact on many financial services. Yet long-term investors have received curiously little guidance from academic financial economists. Mean-variance analysis, developed almost fifty years ago, has provided a basic paradigm for portfolio choice. This approach usefully emphasizes the ability of diversification to reduce risk, but it ignores several critically important factors. Most notably, the analysis is static; it assumes that investors care only about risks to wealth one period ahead. However, many investors—-both individuals and institutions such as charitable foundations or universities—-seek to finance a stream of consumption over a long lifetime. In addition, mean-variance analysis treats financial wealth in isolation from income. Long-term investors typically receive a stream of income and use it, along with financial wealth, to support their consumption. At the theoretical level, it is well understood that the solution to a long-term portfolio choice problem can be very different from the solution to a short-term problem. Long-term investors care about intertemporal shocks to investment opportunities and labor income as well as shocks to wealth itself, and they may use financial assets to hedge their intertemporal risks. This should be important in practice because there is a great deal of empirical evidence that investment opportunities—-both interest rates and risk premia on bonds and stocks—-vary through time. Yet this insight has had little influence on investment practice because it is hard to solve for optimal portfolios in intertemporal models. This book seeks to develop the intertemporal approach into an empirical paradigm that can compete with the standard mean-variance analysis. The book shows that long-term inflation-indexed bonds are the riskless asset for long-term investors, it explains the conditions under which stocks are safer assets for long-term than for short-term investors, and it shows how labor income influences portfolio choice. These results shed new light on the rules of thumb used by financial planners. The book explains recent advances in both analytical and numerical methods, and shows how they can be used to understand the portfolio choice problems of long-term investors.
Author : Moshe A. Milevsky
Publisher :
ISBN 13 :
Total Pages : 31 pages
Book Rating : 4.:/5 (129 download)
Download or read book Portfolio Choice and Life Insurance written by Moshe A. Milevsky and published by . This book was released on 2009 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study a class of portfolio choice problems that combine life insurance and labor income under constant relative risk aversion preferences (CRRA) preferences for consumption, within the optimal control framework pioneered by Merton (1969, 1971). Our model differs from previous research by (i) focusing attention on the correlation between human capital and financial capital, and (ii) modeling the utility of the family as opposed to separating consumption and bequest. From a technical point of view we show how the underlying Hamilton-Jacobi-Bellman (HJB) equation can be simplified using a similarity reduction technique, which then allows for the implementation of an efficient numerical solution. And, for reasonable financial economic parameter values, a closed-form approximation is derived which greatly simplifies the numerical calculations. A variety of example illustrating our numerical algorithm are also provided. Our main qualitative result is that households whose primary breadwinner's wages are negatively correlated with financial market returns, should optimally purchase more life insurance and can afford to take more risky positions with their financial portfolio. In addition, we find that the optimal face value of life insurance is remarkably insensitive to the family's risk aversion.
Author : Charles Favreau
Publisher :
ISBN 13 :
Total Pages : 40 pages
Book Rating : 4.:/5 (13 download)
Download or read book Does Social Conformity Influence Portfolio Choice? Evidence from 401(K) Allocations written by Charles Favreau and published by . This book was released on 2016 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial researchers agree that allocating money to employer stock in a 401(k) plan is a poor strategy, yet many employees do so. Not only does this investment strategy bear unrewarded idiosyncratic risk, but it also correlates employees' retirement portfolios with their human capital. I find evidence that social conformity contributes to this selection. Specifically, the percentage allocated to company stock by employees in the 401(k) plan is positively related to both the net open-market purchases of company stock by management and the percentage of the defined benefits plan invested in company stock. Surprisingly, the allocation to company stock in 401(k) plans increases with investment in employee stock ownership plans (ESOPs), which are a dominant substitute since they often offer stock at a discount. Lastly, I provide additional support for the social conformity hypothesis through interaction tests. The relationship between employees and management is influenced by geographic dispersion and trust within the firm -- two factors that alter group cohesion and, in turn, social conformity.
