private wealth
154001818
Income and Wealth Effects on Private Label Demand: Evidence from the Great Recession
We measure the causal effects of income and wealth on the demand for private label products. Prior research suggests that these effects are large and, in particular, that private label demand rises during recessions. Our empirical analysis is based on a comprehensive household level transactions database matched with price information from store level scanner data and wealth data based on local house value indices. The Great Recession provides a key source of the variation in our data, with a large and geographically diverse impact on household incomes over time. We estimate income and wealth effects using "within" variation of income and wealth at the household level. Our estimates can be interpreted as income and wealth effects consistent with a consumer demand model based on utility maximization. We establish a precisely measured negative effect of income on private label shares. The effect of wealth is negative but not precisely measured. However, the estimated effect sizes are small, in contrast with prior academic work and industry views. An examination of the possible supply side response to the recession shows only small changes in the relative price of national brand and private label products. Our estimates also reveal a large positive trend in private label shares that predates the Great Recession. We examine some possible factors underlying this trend, but find no evidence that this trend is systematically related to specific private label quality tiers or to the overall rate of private label versus national brand product introductions.
Jean-Pierre Dube Gunter J Hitsch Peter E Rossi
168372782
Private Wealth Management
D L Preece
154511199
Perspectives from the Literature of Private Wealth Management
Private wealth management is the investment management specialization focused on high net worth individuals and families. Portfolio design and investment solutions in private wealth management are customized to reflect the complexities of the investor's unique circumstances. This literature review reflects the current best thinking on private wealth management.
The Journal of Wealth Management
William W Jennings Stephen M Horan William Reichenstein Jean Louis Brunel
713114
The Sources of Shareholder Wealth Gains from Going Private Transactions: The Role of Controlling Shareholders
The present study investigates the sources of shareholder wealth gains as measured by cumulative abnormal returns and premiums from going private transactions (GPTs) Using data for 314 GPTs from 18 Western European countries, we find that the announcements of GPTs generate a cumulative average abnormal return of about 22% and that pre transaction shareholders on average receive a raw premium of about 36% We further find that these shareholder wealth gains increase with the degree of separation of cash flow and control rights of the pre transaction ultimate owner and decrease with its ownership interests and with the presence of a second large shareholder. Taken together, these findings support the view that GPTs are expected to mitigate the inefficiencies induced by pre transaction agency problems between controlling and minority shareholders. Thus, shareholder wealth gains from GPTs reflect the potential additional value that will be created under private ownership.
Sabri Boubaker Alexis Cellier Wael Rouatbi
2664467
Determinants of sovereign wealth fund investment in private equity vs public equity
This paper examines the investments of 19 sovereign wealth funds (SWFs) in 424 firms (both public and private) around the world from 1991 through 2010. The data indicate that SWFs, similar to other institutional investors, are less likely to invest in private equity than in public equity internationally. However, the economic significance of this impact is surprisingly low. Unlike other institutional investors, SWFs are more likely to invest in private equity compared with public equity in target nations where investor protection is low, and where the bilateral political relations between the SWF and the target nation are weak. Surprisingly, cultural differences play a marginally positive role in the choice to invest in private equity investment outside an SWF's own sovereign nation. Comprehensively, we find that SWFs act distinctively from other traditional institutional investors when investing in private equity.
Sofia Johan April M Knill Nathan Mauck
33217283
Private Wealth and Planned Early Retirement: A Panel Data Analysis for the Netherlands, 1994 2009
We study the causal relation between private wealth and retirement age. We propose two estimation strategies based on expected retirement age. The outcome variable is observed repeatedly over time. We correct first for the unobserved heterogeneity in the disutility of work by using panel data techniques. Next, we exploit information on expected wealth accumulation in order to identify the unexpected component in wealth accumulation. In line with the literature we find a small but significant effect of private wealth on planned early retirement.
Raun van Ooijen Mauro Mastrogiacomo R W Euwals
154419914
The effects of public pensions on private wealth: evidence on the German savings puzzle
Based on German panel data between 1984 and 1999, we test for the interaction of social security benefits and private wealth formation. In a simple life cylce model benefits from public pension systems should displace equal amounts of private retirement accumulation. Our estimate for the offset effect, corrected for several possible measurement biases, is much lower, however, than expected from pure life cycle considerations and less than comparable estimates for the US and the UK. This result thus supports other evidence on a particular German savings puzzle, which might be due to market imperfections and/or bounded rational behaviour.
Sangho Kim Rainer Klump
154405141
Does housing wealth affect private consumption in European post transition countries? Evidence from linear and threshold models
This article analyses the relationship between housing wealth and consumption for four European post transition economies: Bulgaria, Croatia, Estonia and the Czech Republic. We use a vector error correction model and a threshold error correction model in order to asses the long run and the short run responsiveness of consumption to permanent changes in housing wealth. We find evidence supporting the existence of the housing wealth effect in all four countries, the strength of which is comparable with developed countries' wealth effect. In Bulgaria, Croatia and Estonia the response of consumption to housing wealth changes is characterised by threshold effects, while in the Czech Republic the wealth effect is detected only in the linear framework. The error correction model estimates suggest aggregate consumption adjusts to deviations from the long run equilibrium; however, in countries where the wealth effect is characterised by threshold effects this adjustment process is partial and takes place when consumption is below levels warranted by the fundamentals. We also find evidence of relatively strong consumption persistence in three of the four countries.
Amina Ahec Sonje Anita Ceh Casni Maruska Vizek
168029581
Private Wealth Management: A Review
Private wealth management is the investment management specialization focused on high net worth individuals and families. Portfolio design and investment solutions in private wealth management are customized to reflect the complexities of the investor's unique circumstances. This review reflects the current best thinking on private wealth management.
W JenningsWilliam M HoranStephen
54841883
The long run relationship between private consumption and wealth: common and idiosyncratic effects
We investigate the long run relationship between private consumption, disposable income and wealth approximated by equity and house price indices for a panel of 15 industrialized countries. Consumption, income and wealth are cointegrated in their common components. The impact of house prices exceeds the effect arising from equity wealth. The long run vector is broadly in line with the life cycle permanent income hypothesis, if house prices are allowed to enter the relationship. At the idiosyncratic level, a long run equilibrium is detected between consumption and income, i.e. the wealth variable can be excluded. The income elasticity in the idiosyncratic relationship is significantly less than unity. Hence, the presence of wealth effects in consumption equations arises from the international integration of asset markets and points to the relevance of risk sharing activities of agents. Without sufficient opportunities, an increase in national saving rates would be expected, leading to a lower path of private consumption expenditures.
Christian Dreger Hans-Eggert Reimers