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Experimental Evidence on Socioeconomic Differences in Risk‐Taking and Risk Premiums

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  • Zheng Li

Abstract

Using a route choice experiment with embedded travel time variability, this study empirically estimates car commuters’ risk attitudes and taste preferences within a nonlinear mixed logit model. In addition to the identified overall risk‐taking behaviour, we find that risk attitudes covary with some sociodemographic characteristics, that is, older commuters are more risk‐taking than young ones and higher‐income commuters are less risk‐taking than low‐income ones. The implications of accounting for systematic risk attitude heterogeneity for valuing travellers’ willingness to pay for travel time improvement are also discussed.

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  • Zheng Li, 2020. "Experimental Evidence on Socioeconomic Differences in Risk‐Taking and Risk Premiums," The Economic Record, The Economic Society of Australia, vol. 96(313), pages 140-152, June.
    • Handle: RePEc:bla:ecorec:v:96:y:2020:i:313:p:140-152
    DOI: 10.1111/1475-4932.12544
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