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Social and Behavioral Sciences Commons™
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Full-Text Articles in Social and Behavioral Sciences
Household Saving: Micro Theories And Micro Facts, Martin Browning, Annamaria Lusardi
Household Saving: Micro Theories And Micro Facts, Martin Browning, Annamaria Lusardi
Dartmouth Scholarship
In this survey, we review the recent theoretical and empirical literature on household saving and consumption. The discussion is structured around a list of motives for saving and how well the standard theory captures these motives. We show that almost all of the motives for saving that have been suggested in the informal saving literature can be captured in the standard optimizing model. Particular attention is given to recent work on the precautionary motive and its implications for saving and consumption behavior. We also discuss the "behavioral" or "psychological" approach that eschews the use of standard optimization techniques and focuses …
How Retirement Saving Programs Increase Saving, James M. Poterba, Steven F. Venti, David A. Wise
How Retirement Saving Programs Increase Saving, James M. Poterba, Steven F. Venti, David A. Wise
Dartmouth Scholarship
This paper summarizes the authors work on the effect of IRA and 401(k) contributions on net personal saving. They consider many different nonparametric approaches to controlling for heterogeneity in individual saving behavior and conclude that the weight of the available evidence suggests that contributions to both IRAs and 401(k)s largely represent new saving. The authors devote particular attention to reconciling their results with the findings in other studies that reach different conclusions, sometimes using the same databases that the authors analyze. Methodological limitations that undermine the reliability of results in other studies explain many of these disparities.