THE DETERMINANTS OF RISK AVERSION: THE ROLE OF INTERGENERATIONAL TRANSMISSION

Maria De Paola ()

No 201016, Working Papers from Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF

Abstract: This paper studies the relationship between risk attitudes and individual characteristics focusing on the intergenerational transmission of risk preferences. We use a data set on a sample of Italian students allowing us to build different measures of risk aversion, based respectively on a survey asking students about their willing to invest in a risky asset and about their preferences for job security and on the results of an entry test using explicit penalty points in the case of incorrect answers. Consistently with findings emerging form the existing literature, we find that risk aversion is positively related to age, being female and family income and negatively related to individual ability. As far as intergenerational transmission of preferences is concerned, from our analysis it emerges that students whose fathers are entrepreneurs have a higher propensity to take risks, while students whose fathers are employed in the public sector are more risk averse. Only fathers matter for their children risk attitudes. These results are robust to different measures of risk aversion and to different specifications of our model.

Keywords: risk aversion; college choice; education (search for similar items in EconPapers)
JEL-codes: I21 J24 Z13 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2010-10
New Economics Papers: this item is included in nep-ent and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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http://www.ecostat.unical.it/RePEc/WorkingPapers/WP16_2010.pdf First version, 2010-10 (application/pdf)

Related works:
Journal Article: The Determinants of Risk Aversion: The Role of Intergenerational Transmission (2013)
Journal Article: The Determinants of Risk Aversion: The Role of Intergenerational Transmission (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:clb:wpaper:201016

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