Working Paper: CEPR ID: DP8934
Authors: Luigi Guiso; Paolo Sodini
Abstract: Household finance - the normative and positive study of how households use financial markets to achieve their objectives - has gained a lot of attention over the past decade and has become a field with its own identity, style and agenda. In this paper we review its evolution and most recent developments.
Keywords: Consumer Financial Protection; Financial Advice; Household Financial Decisions; Individual Portfolio Choice
JEL Codes: D1; D3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| lack of financial knowledge (G53) | suboptimal financial decisions (G41) |
| human capital (J24) | household financial decisions (G50) |
| financial sophistication (G53) | sound financial choices (G11) |
| institutional environment (D02) | household financial decisions (G50) |
| risk aversion (D81) | lower participation in risky assets (D14) |