Using data from the Living Costs and Food Survey in the UK over 1978-2009 we document that households with extremely low measured income (below 10% of median income) on average spend much more than those with merely moderately low income (those below 50% of median income): in short, the graph of...

This paper compares consumption and income as measures of households' living standards using UK data. It presents evidence that income is likely to be under-recorded for households with low resources. It describes the different impressions one gets about trends in the level and inequality of...

A growing literature uses now widely available data on beliefs and expectations in the estimation of structural models. In this chapter, we review this literature, with an emphasis on models of individual and household behavior. We first show how expectations data have been used to relax strong...

Parental investments in children can take one of three broad forms: (1) Time investments during child-hood and adolescence that aid child development, and in particular cognitive ability (2) Educational investments that improve school quality and hence educational outcomes (3) Cash investments...

Parental investments significantly impact children’s outcomes. Exploiting panel data covering individuals from birth to retirement, we estimate child skill production functions and embed them into an estimated dynastic model in which altruistic mothers and fathers make investments in their...

The accumulation (and "decumulation") of wealth is a process that has come increasingly under the spotlight in recent years. There is growing policy and societal interest in understanding when, how and why households are building up (and running down) wealth, how this differs between different...

The "annuity puzzle" refers to the fact that annuities are rarely purchased despite the longevity insurance they provide. Most explanations for this puzzle assume that individuals have accurate expectations about their future survival. We provide evidence that individuals mis-perceive their...

Using a lifecycle model of consumption, saving and portfolio choice combined with linked survey and administrative data on wealth and lifetime earnings we evaluate measures of retirement preparedness. We estimate heterogeneous discount factors for households and compare the estimates of their...

We analyze lifecycle saving strategies using a recursive utility model calibrated to match empirical estimates for the value of a statistical life. We show that, with a positive value of life, risk aversion reduces savings and annuity purchase. Risk averse agents are willing to make an early...