Chapter | Handbook of Behavioral Economics | 2018

Behavioral Household Finance

by John Beshears, James J. Choi, David Laibson and Brigitte C. Madrian

Abstract

This chapter provides an overview of household finance. The first part summarizes key facts regarding household financial behavior, emphasizing empirical regularities that are inconsistent with the standard classical economic model and discussing extensions of the classical model and explanations grounded in behavioral economics that can account for the observed patterns. This part covers five topics: consumption and savings, borrowing, payments, asset allocation, and insurance. The second part addresses interventions that firms, governments, and other parties deploy to shape household financial outcomes: education and information, peer effects and social influence, product design, advice and disclosure, choice architecture, and interventions that directly target prices or quantities.

Keywords: Personal Finance; Global Range; Household; Behavior; Strategy; Governing Rules, Regulations, and Reforms; Product Design; Welfare or Wellbeing;

Format: Print Read Now

Citation:

Beshears, John, James J. Choi, David Laibson, and Brigitte C. Madrian. "Behavioral Household Finance." In Handbook of Behavioral Economics: Foundations and Applications 1, edited by B. Douglas Bernheim, Stefano DellaVigna, and David Laibson, 177–276. Amsterdam: Elsevier, 2018.

About the Author

Photo
John Beshears
Terrie F. and Bradley M. Bloom Associate Professor of Business Administration
Negotiation, Organizations & Markets

View Profile »
View Publications »

 
Campus Map
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→ Map & Directions
Copyright © President & Fellows of Harvard College