Subjective measures of household preferences and financial decisions

In intertemporal models of household consumption or portfolio choice, house hold behaviour depends on, for example, the household's rate of time prefer ence, the rate of risk aversion, and the household's information set. In th is paper we use a survey of Dutch households which contains direct subjecti ve information on risk aversion and time preference and on interest in fina ncial matters. We first describe these data and analyze how they relate to household characteristics and household income. We then investigate whether these variables are related to households' financial decisions on home own ership, mortgages and ownership of risky assets. Our results are broadly in accordance with economic theory. (C) 1999 Elsevier Science B.V. All rights reserved. PsycINFO classification: 3900; 3920 JEL classification: C81; D12 ; D90.