Measuring individual risk preferences

Catherine Eckel

IZA World of Labor, 2019, No 454, 454

Abstract: Risk aversion is an important factor in many settings, including individual decisions about investment or occupational choice, and government choices about policies affecting environmental, industrial, or health risks. Risk preferences are measured using surveys or incentivized games with real consequences. Reviewing the different approaches to measuring individual risk aversion shows that the best approach will depend on the question being asked and the study's target population. In particular, economists’ gold standard of incentivized games may not be superior to surveys in all settings.

Keywords: risk aversion; risk preferences; incentivized measures; survey measures (search for similar items in EconPapers)
JEL-codes: C1 D81 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (6)

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