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Intergenerational Transmission of Risk Attitudes: A Revealed Preference Approach

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  • Andrea Leuermann
  • Sarah Necker
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    Abstract

    This study investigates whether the willingness to take income risks revealed by occupational choice is transmitted from parents to their children. Using data from the German Socio-Economic Panel (SOEP), we find that fathers' riskiness of job is a significant determinant of children's occupational risk, in particular sons' (excluding parent-child pairs with identical occupations). This is the first piece of evidence for intergenerational transmission of risk attitudes relying on real world behavior. It shows that not only individuals' own assessments of their risk attitudes correlate (found by previous studies) but also risk preferences shown in exactly the same situation.

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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.389041.de/diw_sp0412.pdf
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    Bibliographic Info

    Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 412.

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    Length: 40 p.
    Date of creation: 2011
    Date of revision:
    Handle: RePEc:diw:diwsop:diw_sp412

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    Keywords: Risk preferences; intergenerational transmission; occupational choice;

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    References

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    23. Eckel, Catherine C. & Grossman, Philip J., 2008. "Men, Women and Risk Aversion: Experimental Evidence," Handbook of Experimental Economics Results, Elsevier.
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    25. Jungmin Lee & Cary Deck & Javier Reyes & Chris Rosen, 2008. "Measuring Risk Attitudes Controlling for Personality Traits," Working Papers 0801, Florida International University, Department of Economics.
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    27. Maria De Paola, 2010. "The Determinants Of Risk Aversion: The Role Of Intergenerational Transmission," Working Papers 201016, Università della Calabria, Dipartimento di Scienze Economiche, Statistiche e Finanziarie (Ex Dipartimento di Economia e Statistica).
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