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Singh discusses her research in India on infertility

Johnston concerned declines in teen smoking threatened by e-cigarettes

Frey discusses book Diversity Explosion

Highlights

Apply for 2-year NICHD Postdoctoral Fellowships that begin September 2015

PSC Fall 2014 Newsletter now available

Martha Bailey and Nicolas Duquette win Cole Prize for article on War on Poverty

Michigan's graduate sociology program tied for 4th with Stanford in USN&WR rankings

Next Brown Bag

Monday, Jan 12
Filiz Garip, Changing Dynamics of Mexico-U.S. Migration

Consumption Commitments and Employment Contracts

Archived Abstract of Former PSC Researcher

Postlewaite, Andrew, Larry Samuelson, and Daniel Silverman. 2001. "Consumption Commitments and Employment Contracts." PIER Working Paper 06-002Penn Institute for Economic Research.

We examine an economy in which the cost of consuming some goods can be reduced by making commitments to consumption levels independent of the state. For example, it is cheaper to produce housing services via owner-occupied than rented housing, but the transactions costs associated with the former prompt relatively inflexible housing consumption paths. We show that consumption commitments can cause risk-neutral consumers to care about risk, creating incentives to both insure risks and bunch uninsured risks together. For example, workers may prefer to avoid wage risk while bearing an unemployment risk that is concentrated in as few states as possible.

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