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Are Tall People Less Risk Averse than Others?

  • Olaf Hübler

This paper examines the question of whether risk aversion of prime-age workers is negatively correlated with human height to a statistically significant degree. A variety of estimation methods, tests and specifications yield robust results that permit one to answer this question in the affirmative. Hausman-Taylor panel estimates, however, reveal that height effects disappear if personality traits and skills, parents' behaviour, and interactions between environment and individual abilities appear simultaneously. Height is a good proxy for these influences if they are not observable. Not only one factor but a combination of several traits and interaction effects can describe the time-invariant individual effect in a panel model of risk attitude.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.405739.de/diw_sp0457.pdf
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Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 457.

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Length: 28 p.
Date of creation: 2012
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp457
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  6. Heineck, Guido, 2009. "Too tall to be smart? The relationship between height and cognitive abilities," Economics Letters, Elsevier, vol. 105(1), pages 78-80, October.
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  15. Hryshko, Dmytro & Luengo-Prado, Maria Jose & Sorensen, Bent, 2011. "Childhood Determinants of Risk Aversion: The Long Shadow of Compulsory Education," Working Papers 2011-2, University of Alberta, Department of Economics.
  16. Smith Trenton G. & Stoddard Christiana & Barnes Michael G, 2009. "Why the Poor Get Fat: Weight Gain and Economic Insecurity," Forum for Health Economics & Policy, De Gruyter, vol. 12(2), pages 1-31, June.
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  21. Kuhn, Peter & Weinberger, Catherine, 2003. "Leadership Skills and Wages," University of California at Santa Barbara, Economics Working Paper Series qt50q3c9n1, Department of Economics, UC Santa Barbara.
  22. Andreas Schick & Richard H. Steckel, 2010. "Height as a Proxy for Cognitive and Non-Cognitive Ability," NBER Working Papers 16570, National Bureau of Economic Research, Inc.
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