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The Determinants Of Risk Aversion: The Role Of Intergenerational Transmission

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Author Info

  • Maria De Paola

    ()
    (Dipartimento di Economia e Statistica, Università della Calabria)

Abstract

This paper studies the relationship between risk attitudes and individual characteristics focusing on the intergenerational transmission of risk preferences. We use a data set on a sample of Italian students allowing us to build different measures of risk aversion, based respectively on a survey asking students about their willing to invest in a risky asset and about their preferences for job security and on the results of an entry test using explicit penalty points in the case of incorrect answers. Consistently with findings emerging form the existing literature, we find that risk aversion is positively related to age, being female and family income and negatively related to individual ability. As far as intergenerational transmission of preferences is concerned, from our analysis it emerges that students whose fathers are entrepreneurs have a higher propensity to take risks, while students whose fathers are employed in the public sector are more risk averse. Only fathers matter for their children risk attitudes. These results are robust to different measures of risk aversion and to different specifications of our model.

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File URL: http://www.ecostat.unical.it/RePEc/WorkingPapers/WP16_2010.pdf
File Function: First version, 2010-10
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Bibliographic Info

Paper provided by Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica) in its series Working Papers with number 201016.

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Length: 16 pages
Date of creation: Oct 2010
Date of revision:
Handle: RePEc:clb:wpaper:201016

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Postal: Università della Calabria, Dipartimento di Economia, Statistica e Finanza, Ponte Pietro Bucci, Cubo 0/C, I-87036 Arcavacata di Rende, CS, Italy
Phone: +39 0984 492413
Fax: +39 0984 492421
Web page: http://www.unical.it/portale/strutture/dipartimenti_240/disesf/
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Related research

Keywords: risk aversion; college choice; education;

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References

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  1. Don Bellante & Albert N. Link, 1981. "Are public sector workers more risk averse than private sector workers?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 34(3), pages 408-412, April.
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Cited by:
  1. Andrea Leuermann & Sarah Necker, 2011. "Intergenerational Transmission of Risk Attitudes: A Revealed Preference Approach," SOEPpapers on Multidisciplinary Panel Data Research 412, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Leuermann, Andrea & Necker, Sarah, 2011. "Intergenerational transmission of risk attitudes: A revealed preference approach," Freiburg Discussion Papers on Constitutional Economics 11/4, Walter Eucken Institut e.V..
  3. Jaime Ruiz-Tagle V. & Pablo Tapia G., 2012. "Brechas por Género en Aversión al Riesgo," Working Papers wp373, University of Chile, Department of Economics.
  4. Maria De Paola & Francesca Gioia, 2011. "Risk Aversion And Major Choice: Evidence From Italian Students," Working Papers 201107, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).

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