Abstract:
The thesis tries to rationalise the average composition of households'asset portfolios by two simple models: a static portfolio choice model and a dynamic life-cycle model. Both are calibrated with, and measured against, aggregated Norwegian data on household wealth allocation over 1992-2006, with emphasis on the role of housing as a savings vehicle. While neither approach is able to fully explain the observed holdings with the corresponding data, the portfolio choice model curiously finds that older asset return estimates (1966-1991) prescribe allocations that nearly match those observed over 1992-2006.