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Measuring multivariate risk preferences in the health domain

Arthur Attema, l’Haridon, Olivier and Gijs van de Kuilen
Authors registered in the RePEc Author Service: Olivier L'Haridon

Journal of Health Economics, 2019, vol. 64, issue C, 15-24

Abstract: We investigate univariate and multivariate risk preferences for health (longevity) and wealth. We measure attitudes toward correlation and attitudes toward higher order dependence structures such as cross-prudence and cross-temperance, making use of the risk apportionment technique proposed by Eeckhoudt et al. (2007). For multivariate gains, we find correlation aversion and cross-prudence in longevity and wealth. For losses, we observe correlation seeking and cross-imprudence. We do not find clear evidence for cross-temperance. Our results indicate that longevity and wealth are considered to be substitutes for gains, but not for losses. Second, univariate (higher order) risk preferences are comparable for longevity and wealth, although somewhat closer to linearity for wealth. Third, we find evidence that attitudes toward dependence structures in the health domain are sign-dependent.

Keywords: Multivariate risk attitudes; Health; Prudence; Temperance (search for similar items in EconPapers)
JEL-codes: B41 D90 I10 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:64:y:2019:i:c:p:15-24

DOI: 10.1016/j.jhealeco.2018.12.004

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Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire

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