Skip navigation
Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/26291
Title: The Age of Reason: Financial Decisions Over the Lifecycle
Authors: Agarwal, Sumit
John C., Driscoll
Xavier, Gabaix
Laibson, David
Keywords: Household finance;behavioral finance;behavioral industrial organization;aging;shrouding;auto loans;credit cards;fees;home equity;home equity
Issue Date: 7-Jun-2007
Series/Report no.: FIN-07-005
Abstract: The sophistication of financial decisions varies with age: middle-aged adults borrow at lower interest rates and pay fewer fees compared to both younger and older adults. We document this pattern in ten financial markets. The measured effects cannot be explained by observed risk characteristics. The sophistication of financial choices peaks around age 53 in our cross-sectional data. Our results are consistent with the hypothesis that financial sophistication rises and then falls with age, although the patterns that we observe represent a mix of age effects and cohort effects.
URI: http://hdl.handle.net/2451/26291
Appears in Collections:Finance Working Papers

Files in This Item:
File Description SizeFormat 
07-05.pdf349.83 kBAdobe PDFView/Open


Items in FDA are protected by copyright, with all rights reserved, unless otherwise indicated.