@article{6d6f85b7fe394f66aadd88be4adb4b58,
title = "Risk sharing by households within and across regions and industries",
abstract = "Cochrane (1991, Journal of Political Economy 99, 957-976) and Mace (1991, Journal of Political Economy 99, 928-956) test if risk sharing across households is complete in the sense that household consumption moves one-for-one with aggregate consumption. In their studies the source of income risk is idiosyncratic, and agents can share risk across the entire economy. Using a sample of households from the Panel Study on Income Dynamics (PSID), we explore whether households share the risk associated with their industries and regions across households in other regions and industries. We find that a large fraction of risk faced by households is not shared across regions and industries.",
keywords = "E21, Quantity anomaly, Risk sharing",
author = "Hess, {Gregory D.} and Kwanho Shin",
note = "Funding Information: This paper has benefited from comments by an anonymous referee, David Backus, Willem Buiter, Mario Crucini, Kwang Soo Cheong, Kiseok Hong, Robert Sauer, Eric van Wincoop, Oved Yosha and seminar participants at Birkbeck College, UC Davis, the Federal Reserve Bank of Kansas City, the Regional Macroeconomics and Finance Conference at Tel Aviv University, the CEPR Macroeconomics Workshop, the Mid-west Macroeconomics Conference, the Korea American Economic Association Meetings and the Econometric Society Meetings. We would like to thank Brad Wilson for research assistance. This work was supported by Korea Research Foundation Grant (KRF-99). Part of this paper was written while Gregory D. Hess was a Visiting Scholar at the Federal Reserve Bank of Kansas City. The opinions expressed are those of the authors and do not necessarily reflect views of the Federal Reserve Bank of Kansas City or the Federal Reserve System. ",
year = "2000",
month = jun,
doi = "10.1016/S0304-3932(00)00007-6",
language = "English",
volume = "45",
pages = "533--560",
journal = "Journal of Monetary Economics",
issn = "0304-3932",
publisher = "Elsevier",
number = "3",
}