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Time preferences and risk aversion: Tests on domain differences

Listed author(s):
  • Christos A. Ioannou

    ()

    (University of Southampton)

  • Jana Sadeh

    ()

    (University of Southampton)

Abstract Understanding how individuals discount and evaluate the risks of environmental outcomes is a prime component in designing effective environmental policy. We use an incentivized experimental design to investigate whether subjects’ time preferences and risk aversion across the monetary and environmental domains differ. We find that subjects’ time preferences are not significantly different across the two domains. In contrast, subjects exhibit a higher degree of risk aversion in the environmental domain. Furthermore, we corroborate earlier results, documenting that women are more risk averse than men in the monetary domain, and show this finding to also hold in the environmental domain.

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File URL: http://link.springer.com/10.1007/s11166-016-9245-8
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Article provided by Springer in its journal Journal of Risk and Uncertainty.

Volume (Year): 53 (2016)
Issue (Month): 1 (August)
Pages: 29-54

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Handle: RePEc:kap:jrisku:v:53:y:2016:i:1:d:10.1007_s11166-016-9245-8
DOI: 10.1007/s11166-016-9245-8
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/economic+theory/journal/11166/PS2

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