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Author: Lam, Pok-Sang
Resulting in 1 citation.
1. Angerer, Xiaohong W.
Lam, Pok-Sang
Income Risk and Portfolio Choice: An Empirical Study
Journal of Finance 64,2 (April 2009): 1037-1055
Cohort(s): NLSY79
Publisher: Wiley Online
Keyword(s): Earnings; Financial Investments; Income Dynamics/Shocks; Income Risk; Life Cycle Research

Permission to reprint the abstract has not been received from the publisher.

This paper investigates the relationship between portfolio choice and labor income risk in the National Longitudinal Survey of Youth 1979 Cohort. Permanent income risk (variability of shocks to income that have permanent effect) significantly reduces the share of risky assets in the household's portfolio, while transitory income risk (variability of shocks with no lasting effect) does not. This result provides strong evidence that households' portfolio choices respond to labor income risks in a manner consistent with economic theory.
Bibliography Citation
Angerer, Xiaohong W. and Pok-Sang Lam. "Income Risk and Portfolio Choice: An Empirical Study." Journal of Finance 64,2 (April 2009): 1037-1055.