IdEP Seminar "Financial Returns to Household Inventory Management ", Lorenz Kueng
Households tend to hold substantial amounts of non-financial assets in the form of consumer goods inventories that are unobserved by traditional measures of wealth, about $725 on average. Such holdings can eclipse total financial assets among households in the lowest income quintile. Households can obtain significant financial returns from shopping strategically and optimally managing these inventories. In addition, they choose to maintain liquid savings---household working capital---not just for precautionary motives but also to support this inventory management.