Ambiguity and risk measures in the lab and students’ real-life borrowing behavior

Kim Fairley and Utz Weitzel

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2017, vol. 67, issue C, 85-98

Abstract: This study analyzes the external validity of experimentally elicited ambiguity aversion, likelihood insensitivity and risk aversion on real-life decision-making in the field of student loans. Our main finding is that ambiguity aversion, likelihood insensitivity and risk aversion are not related to the decision to take out a student loan nor to the amount students decide to borrow, conditional on having a loan. We discuss our results in the context of recent advances to relate lab measures of ambiguity aversion and likelihood insensitivity to real economic decisions.

Keywords: Ambiguity aversion; Likelihood insensitivity; Risk aversion; Borrowing behavior; Student loans (search for similar items in EconPapers)
JEL-codes: C9 D8 H4 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:67:y:2017:i:c:p:85-98

DOI: 10.1016/j.socec.2016.12.001

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