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2018 | OriginalPaper | Chapter

1. Introduction and Conceptual Framework

Authors : Mariacristina Rossi, Eva M. Sierminska

Published in: Wealth and Homeownership

Publisher: Springer International Publishing

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Abstract

This chapter introduces the reader to the key variables of our book: wealth and homeownership. We first briefly describe the evolution of assets and homeownership and then provide a conceptual framework within which the decision process of wealth accumulation and homeownership can be examined. This framework will be used as the conceptual background used to interpret asset accumulation decisions.

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next chapter Wealth Variation Across Countries
Footnotes
1
Evans et al. (2003), for example, explain how more autonomy goes hand in hand with homeownership.
 
2
Women are gaining importance in society; now representing the majority of graduate students, women account for around 60% of graduate and undergraduate students (Damisch et al. 2000).
 
3
Given that the first period budget is A1 = y1 − c1 and the year before the last one is AT − 1 = yT − 1 − cT − 1 + (1 + r)AT − 2; while the terminal budget is 0 = yT − cT + (1 + r)AT − 1, multiplying each equation by (1 + r)T − t, we can sum up all budgets and all wealth levels simplify into the intertemporal budget constraint.
 
4
Using the Lagrangian function, the problem leads to the first order conditions, which show the optimal consumption evolution, stating the equality of consumption over time.
 
5
If uncertainty on lifetime length is considered in the framework, the conclusions of the model are not altered as transforming assets into annuities will neutralize life uncertainty (Yaari 1965).
 
6
Unemployment benefits can partially neutralize the risk of unemployment; however, they have a limited duration. Individuals are inevitably exposed to the risk of becoming unemployed as well as to income variations.
 
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Metadata
Title
Introduction and Conceptual Framework
Authors
Mariacristina Rossi
Eva M. Sierminska
Copyright Year
2018
Book
Wealth and Homeownership

Print ISBN: 978-3-319-92557-8

Electronic ISBN: 978-3-319-92558-5

Copyright Year: 2018

DOI
https://doi.org/10.1007/978-3-319-92558-5_1