Household Finance in Retrospect and Prospect
A new survey shows household finance is now a major research field, fueled by big data, advanced modeling, and behavioral economics. It finds that real-life financial decisions are more complex and error-prone than old models suggest, with surprising trends like consumer inertia and cross-subsidies. The study highlights international differences, introduces terms like wealthy hand-to-mouth households, and stresses the need for better data, regulatory design, and fintech analysis. Gaps remain in gender, demography, and labor market research.
What it examines
This survey reviews the rapid growth of household finance research, highlighting advances in computational methods, access to large datasets, and behavioral economics. It explains how the field studies real-world financial decisions of households, their constraints, and market interactions, aiming to improve understanding and policy design.
What it concludes
The research helps policymakers, financial institutions, and households make better financial decisions. It highlights the need for more data, better models, and careful regulation. Future work should address technology's impact, inequality, and cross-country differences, aiming to improve financial well-being and market fairness for all households.
Evidence objects
Household finance has surged as a major field, fueled by big data, computational modeling, and behavioral economics, revealing complex, error-prone financial decisions and surprising patterns like inertia and cross-subsidies among consumers.
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Researchers now use microeconometric techniques to expose how real-world constraints, beliefs, and social influences shape household choices, impacting market outcomes, policy effectiveness, and highlighting the need for better consumer protection and product design.
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International comparisons show striking differences in household portfolios and debt, especially in emerging markets; the survey calls for deeper research on regulatory design, fintech, and underexplored areas like gender, demography, and labor market modeling.
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This paper uniquely synthesizes the evolution of household finance, emphasizing computational, data, and behavioral advances. While it lacks novel methodologies or empirical findings, its originality lies in contextualizing the fields development and future directions. Readers gain a compelling, comprehensive overview, making it valuable for understanding household finances trajectory and research gaps.
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Raw abstract and provenance
We discuss the distinctive concerns of household finance in relation to other fields of financial economics, and we outline directions for the future growth of
Source row: 1046 · abstract type: snippet