Can Education Change Risk Preference? Evidence from Indonesia and Mexico

Renee Zhou
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Renee Zhou: University of Warwick

Warwick-Monash Economics Student Papers from Warwick Monash Economics Student Papers

Abstract: To test whether education can change risk preference, I exploit the Indonesian school construction programme and the Mexican education reform in compulsory schooling as two separate natural experiments. Applying the instrumental variable approach, I do not find a causal effect of education on risk preference. The results are consistent in the two different settings, so my findings are externally valid. The results suggest that a change in risk preference may not be the channel via which the impact of education on risk-taking in real life. This paper contributes to the literature on the determinants of social preferences and the outcomes of education.

Keywords: Risk preference; risk aversion; education JEL classifications: I25; D90 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-cbe, nep-edu, nep-hea, nep-rmg, nep-sea and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:wrkesp:45

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