Individual Risk Attitudes: Measurement, Determinants and Behavioral Consequences
Abstract
This paper studies risk attitudes using a large representative survey and a complementary experiment conducted with a representative subject pool in subjects'' homes. Using a question asking people about their willingness to take risks "in general", we find that gender, age, height, and parental background have an economically significant impact on willingness to take risks. The experiment confirms the behavioral validity of this measure, using paid lottery choices. Turning to other questions about risk attitudes in specific contexts, we find similar results on the determinants of risk attitudes, and also shed light on the deeper question of stability of risk attitudes across contexts. We conduct a horse race of the ability of different measures to explain risky behaviors such as holdings stocks, occupational choice, and smoking. The question about risk-taking in general generates the best all-around predictor of risky behavior.Download Info
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Paper provided by Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization in its series Research Memoranda with number 039.Length:
Date of creation: 2009
Date of revision:
Handle: RePEc:dgr:umamet:2009039
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Web page: http://www.maastrichtuniversity.nl/web/UMPublications.htm
Related research
Keywords: Economics ;Other versions of this item:
- Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, 06.
- Dohmen Thomas & Falk Armin & Huffman David & Sunde Uwe & Schupp Jürgen & Wagner Gert, 2009. "Individual Risk Attitudes: Measurement, Determinants and Behavioral Consequences," Research Memoranda 007, Maastricht : ROA, Research Centre for Education and the Labour Market.
- D0 - Microeconomics - - General
- D1 - Microeconomics - - Household Behavior
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-26 (All new papers)
- NEP-BEC-2009-09-26 (Business Economics)
- NEP-COM-2009-09-26 (Industrial Competition)
- NEP-MIC-2009-09-26 (Microeconomics)
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