<section name="raw">
    <SEQUENTIAL>
      <record key="001" att1="001" value="194788" att2="194788">001   194788</record>
      <field key="037" subkey="x">englisch</field>
      <field key="050" subkey="x">Forschungsbericht</field>
      <field key="076" subkey="">Ökonomie</field>
      <field key="079" subkey="y">http://www.ihs.ac.at/publications/eco/es-322.pdf</field>
      <field key="079" subkey="z">Fortin, Ines - et al., The Consumption-Investment Decision of a Prospect Theory Household (pdf)</field>
      <field key="079" subkey="y">http://ideas.repec.org/p/ihs/ihsesp/322.html</field>
      <field key="079" subkey="z">Institute for Advanced Studies. Economics Series; 322 (RePEc)</field>
      <field key="079" subkey="y">http://irihs.ihs.ac.at/id/eprint/3974</field>
      <field key="079" subkey="z">Institute for Advanced Studies, Repository IRIHS</field>
      <field key="100" subkey="">Fortin, Ines</field>
      <field key="103" subkey="">Financial Markets and Econometrics, Institute for Advanced Studies, Vienna, Austria</field>
      <field key="104" subkey="a">Hlouskova, Jaroslava</field>
      <field key="107" subkey="">Financial Markets and Econometrics, Institute for Advanced Studies, Vienna, Austria and Department of Economics, Thompson Rivers</field>
      <field key="Uni" subkey="v">ersity, Kamloops, Canada</field>
      <field key="108" subkey="a">Tsigaris, Panagiotis</field>
      <field key="111" subkey="">Department of Economics, Thompson Rivers University, Kamloops, Canada</field>
      <field key="331" subkey="">The Consumption-Investment Decision of a Prospect Theory Household</field>
      <field key="335" subkey="">A Two-Period Model</field>
      <field key="403" subkey="">1. Ed.</field>
      <field key="410" subkey="">Wien</field>
      <field key="412" subkey="">Institut für Höhere Studien</field>
      <field key="425" subkey="">2016, June</field>
      <field key="433" subkey="">58 pp.</field>
      <field key="451" subkey="">Institut für Höhere Studien; Reihe Ökonomie; 322</field>
      <field key="451" subkey="h">Kunst, Robert M. (Ed.) ; Reiter, Michael (Ed.) ;</field>
      <field key="461" subkey="">Economics Series</field>
      <field key="542" subkey="">1605-7996</field>
      <field key="544" subkey="">IHSES 322</field>
      <field key="710" subkey="">G02</field>
      <field key="710" subkey="">G11</field>
      <field key="710" subkey="">E20</field>
      <field key="720" subkey="">Prospect theory</field>
      <field key="720" subkey="">Loss aversion</field>
      <field key="720" subkey="">Consumption-savings decision</field>
      <field key="720" subkey="">Portfolio allocation</field>
      <field key="720" subkey="">Happiness</field>
      <field key="753" subkey="">Abstract: This study extends the literature on portfolio choice under prospect theory preferences by introducing a two-period</field>
      <field key="lif" subkey="e">cycle model, where the household decides on optimal consumption and investment in a portfolio with one risk-free and one</field>
      <field key="ris" subkey="k">y asset. The optimal solution depends primarily on the household’s choice of the present value of the consumption reference</field>
      <field key="lev" subkey="e">ls relative to the present value of its endowment income. If the present value of the consumption reference levels is set</field>
      <field key="bel" subkey="o">w the present value of endowment income, then the household behaves in such a way to avoid relative losses in consumption in</field>
      <field key="any" subkey="">present or future state of nature (good or bad). As a result the degree of loss aversion does not directly affect optimal</field>
      <field key="con" subkey="s">umption and risk taking activity. However, it must be sufficiently high in order to rule out outcomes with relative losses.</field>
      <field key="On" subkey="t">he other hand, if the present value of the consumption reference levels is set exactly equal to the present value of the</field>
      <field key="end" subkey="o">wment income, i.e., the household sets its reference levels such that they are in balance with its income, then the</field>
      <field key="hou" subkey="s">ehold’s optimal consumption is the reference consumption in both periods and the household will not invest in the risky asset</field>
      <field key=". F" subkey="i">nally, if the present value of the household’s consumption reference levels is set above the present value of its endowment</field>
      <field key="inc" subkey="o">me, then the household cannot avoid experiencing a relative loss in consumption, either now or in the future. As a result,</field>
      <field key="los" subkey="s">aversion directly affects consumption and risky investment. Reference levels play a significant role in consumption and risk</field>
      <field key="tak" subkey="i">ng activity. In most cases the household will “follow the Joneses” if the reference levels are set equal to the consumption</field>
      <field key="lev" subkey="e">ls of the Joneses. Independent of how consumption reference levels are set, being more ambitious, i.e., increasing one’s</field>
      <field key="ref" subkey="e">rence levels, will result in less happiness. The only case when this is not true is when reference levels increase with</field>
      <field key="gro" subkey="w">ing income (and the present value of reference levels is set below the present value of endowment income).;</field>
    </SEQUENTIAL>
  </section>