EconPapers    
Economics at your fingertips  
 

Are Risk Preferences Stable across Contexts? Evidence from Insurance Data

Levon Barseghyan, Jeffrey Prince and Joshua Teitelbaum

American Economic Review, 2011, vol. 101, issue 2, 591-631

Abstract: Using a unique dataset, we test whether households' deductible choices in auto and home insurance reflect stable risk preferences. Our test relies on a structural model that assumes households are objective expected utility maximizers and claims are generated by household-coverage specific Poisson processes. We find that the hypothesis of stable risk preferences is rejected by the data. Our analysis suggests that many households exhibit greater risk aversion in their home deductible choices than their auto deductible choices. Our results are robust to several alternative modeling assumptions. (JEL D11, D83)

Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (143)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.101.2.591 (application/pdf)
http://www.aeaweb.org/aer/data/april2011/20081150_data.zip dataset accompanying article (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:101:y:2011:i:2:p:591-631

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2025-03-19
Handle: RePEc:aea:aecrev:v:101:y:2011:i:2:p:591-631