Optimal investment, consumption and life insurance decisions for households with consumption habits under the health shock risk
Clicks: 28
ID: 283521
2024
Article Quality & Performance Metrics
Overall Quality
Not rated
Combines reader engagement with the AI quality analysis. This
article has not been analysed, so there is no overall score —
reader engagement is measured and shown alongside.
Reader Engagement
Emerging Content
8.1
/100
28 views
17 readers
AI Quality Assessment
Not analyzed
Readership in this journal
EmergingRanked #742 of 803 articles by views in arXiv
Most read
Least read
Bar heights use a square-root scale. Only the 120 most-read articles are drawn; the journal has 803 in total.
Mint this article as an NFT
Not yet mintedCreate a permanent, verifiable on-chain record of this article on the Scimatic Network. The NFT is held in your Journament account, and you can withdraw it to your own wallet at any time.
5
SUSD
one-off · no wallet required
Abstract
This paper investigates the optimal investment, consumption, and life
insurance strategies for households under the impact of health shock risk.
Considering the uncertainty of the future health status of family members, a
non-homogeneous Markov process is used to model the health status of the
breadwinner. Drawing upon the theory of habit formation, we investigate the
influence of different consumption habits on households' investment,
consumption, and life insurance strategies. Based on whether the breadwinner is
alive or not, we formulate and solve the corresponding Hamilton-Jacobi-Bellman
(HJB) equations for the two scenarios of breadwinner survival and breadwinner's
demise, respectively, and obtain explicit expressions for the optimal
investment, consumption, and life insurance strategies. Through sensitivity
analysis, it has been shown that the presence of health shocks within
households has a negative impact on investment and consumption decisions, while
the formation of consumption habits increases household propensity for
precautionary savings.
| Reference Key |
tang2024optimal
Use this key to autocite in the manuscript while using
SciMatic Manuscript Manager or Thesis Manager
|
|---|---|
| Authors | Zhen Zhao; Wei Liu; Xiaoyi Tang |
| Journal | arXiv |
| Year | 2024 |
| DOI |
DOI not found
|
| URL | |
| Keywords |
Citations
No citations found. To add a citation, contact the admin at info@scimatic.org
Comments
No comments yet. Be the first to comment on this article.