We address the issue of the efficiency of household portfolios in the presence of housing risk. We treat housing stock as an asset and rents as a stochastic liability stream: over the life cycle, households can be short or long in their net-housing position. Efficient financial portfolios are...

We use life history data covering households in thirteen European countries to analyse residential moves past age 50. We observe four types of moves: renting to owning, owning to renting, trading up or trading down for home-owners. We find that in the younger group (aged 50-64) trading up and...

In this paper we present empirical evidence of the importance of aggregation bias in Euler equations for consumption. The main result is that estimates of the elasticity of intertemporal substitution for consumption are consistently lower for aggregate data than for average cohort data. In...

This paper investigates the causes of the Italian consumption bust of the early 1990s by estimating deviations from 'normal' consumption using household level data for 1985-94. The data set used is a particularly rich, but as yet unexplored, source recently released by ISTAT. It contains...

We argue that health care quality has an important impact on economic inequality and on saving behaviour. We exploit district-wide variability in health care quality provided by the Italian universal public health system to identify the effect of quality on income inequality, health inequality...

In this Paper we analyse unique data on credit applications received by the leading provider of consumer credit in Italy (Findomestic). The data set covers a five year period (1995-99) during which the consumer credit market rapidly expanded in Italy and a new law came into force that set a...

This paper analyzes why corporate governance matters for stock returns if the stock market prices the underlying managerial agency problem correctly. Our theory assumes that strict corporate governance prevents managers from diverting cash flows, but reduces incentives for managerial effort. In...

Banks can deal with their liquidity risk by holding liquid assets (self-insurance), by participating in the interbank market (coinsurance), or by using flexible financing instruments, such as bank capital (risk-sharing). We study how the access to an interbank market affects banks' incentive to...