Individual Risk Attitudes: Measurement, Determinants and Behavioral Consequences
Series
IZA - Discussion papers
Type
discussion paper
Date Issued
2005-09
Author(s)
Sunde, Uwe
;
Dohmen, Thomas
;
Falk, Armin
;
Huffman, David
;
Schupp, Jürgen
;
Wagner, Gerd
Abstract
This paper studies risk attitudes using a large representative survey and a complementary experiment conducted with a representative subject pool in subjects' homes. Using a question asking people about their willingness to take risks "in general", we find that gender, age, height, and parental background have an economically significant impact on willingness to take risks. The experiment confirms the behavioral validity of this measure, using paid lottery choices. Turning to other question about risk attitudes in specific contexts, we find similar results on the determinants of risk attitudes, and also shed light on the deeper question of stability of risk attitudes across contexts. We conduct a horse race of the ability of different measures to explain risky behaviors such as holdings stocks, occupational choice, and smoking. The question about risktaking in general generates the best all-around predictor of risky behavior.
Language
English
Keywords
education
training and the labour market
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
IZA
Publisher place
Bonn, Deutschland
Number
1730
Start page
1
End page
59
Pages
59
Subject(s)
Division(s)
Eprints ID
64788