Eggs and Baskets: Lifecycle Portfolio Dynamics
By Loretti Dobrescu, Akshay Shanker, Hazel Bateman, Ben Rhodri Newell & Susan Thorp Housing and pension wealth are two major contributors to the quality of old-age provision. Here we study the interplay between these two asset classes using the impact of changes in saving incentives on wealth accumulation across the lifetime. To do so, we build and estimate a dynamic lifecycle model of saving and portfolio choice featuring risky earnings, lumpy housing with collateralized borrowing, and financial assets inside and...