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Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences

Author

Listed:
  • Thomas Dohmen
  • Armin Falk
  • David Huffman
  • Uwe Sunde
  • Jürgen Schupp
  • Gert G. Wagner

Abstract

This paper studies risk attitudes using a large representative survey and a complementaryexperiment conducted with a representative subject pool in subjects’ homes. Using aquestion asking people about their willingness to take risks “in general†, we find thatgender, age, height, and parental background have an economically significant impacton willingness to take risks. The experiment confirms the behavioral validity of thismeasure, using paid lottery choices. Turning to other question about risk attitudesin specific contexts, we find similar results on the determinants of risk attitudes, andalso shed light on the deeper question of stability of risk attitudes across contexts. Weconduct a horse race of the ability of different measures to explain risky behaviorssuch as holdings stocks, occupational choice, and smoking. The question about risktakingin general generates the best all-around predictor of risky behavior. (JEL codes:D0, D1, D80, D81, C91, C93, J16, J24, I1).
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • 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, June.
  • Handle: RePEc:bla:jeurec:v:9:y:2011:i:3:p:522-550 DOI: j.1542-4774.2011.01015.x
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    References listed on IDEAS

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    1. Jean-Yves Duclos & Joan Esteban & Debraj Ray, 2004. "Polarization: Concepts, Measurement, Estimation," Econometrica, Econometric Society, vol. 72(6), pages 1737-1772, November.
    2. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 563-573, October.
    3. Francesco Caselli & Wilbur John Coleman II, 2013. "On The Theory Of Ethnic Conflict," Journal of the European Economic Association, European Economic Association, vol. 11, pages 161-192, January.
    4. Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, vol. 87(2), pages 379-415, August.
    5. repec:cup:apsrev:v:97:y:2003:i:01:p:75-90_00 is not listed on IDEAS
    6. Esteban, Joan & Ray, Debraj, 1994. "On the Measurement of Polarization," Econometrica, Econometric Society, vol. 62(4), pages 819-851, July.
    7. Robert H. Bates, 1999. "Ethnicity, Capital Formation, and Conflict," CID Working Papers 27, Center for International Development at Harvard University.
    8. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • 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

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