Determinants of risk aversion over time: Experimental evidence from rural Thailand

Sahra Sakha

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2019, vol. 80, issue C, 184-198

Abstract: We use a repeated incentivized risk experiment in rural Thailand to test determinants of changes in the level of individual risk aversion over time. We find that risk aversion significantly changes between 2008 and 2013 as a result of macro- and micro-level shocks. Strong macroeconomic recovery following the 2007/08 financial crisis makes people less risk averse. On the micro-level, we observe that negative economic and agricultural shocks increase risk aversion and that covariate shocks dominate idiosyncratic shocks. Subjective perceptions of well-being and expectations also play a role but do not drive the macro-micro determinants of changes in individual risk aversion.

Keywords: Risk aversion; Lab-in-the-field experiment; Shocks; Socio-economic determinants (search for similar items in EconPapers)
JEL-codes: D81 O12 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:80:y:2019:i:c:p:184-198

DOI: 10.1016/j.socec.2019.03.008

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