Emotions and Risk Attitudes

Armando N. Meier

American Economic Journal: Applied Economics, 2022, vol. 14, issue 3, 527-58

Abstract: Previous work has shown that preferences are not always stable across time, but surprisingly little is known about the reasons for this instability. I examine whether variation in people's emotions over time predicts changes in risk attitudes. Using a large-panel dataset, I identify happiness, anger, and fear as significant correlates of within-person changes in risk attitudes. Robustness checks indicate a limited role for alternative explanations. An event study around the death of a parent or child further confirms a large relationship between emotions and risk attitudes.

JEL-codes: D12 D81 D91 I31 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (20)

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DOI: 10.1257/app.20200164

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