Time preferences and risk aversion: Tests on domain differences

Christos Ioannou and Jana Sadeh

Journal of Risk and Uncertainty, 2016, vol. 53, issue 1, No 2, 29-54

Abstract: Abstract Understanding how individuals discount and evaluate the risks of environmental outcomes is a prime component in designing effective environmental policy. We use an incentivized experimental design to investigate whether subjects’ time preferences and risk aversion across the monetary and environmental domains differ. We find that subjects’ time preferences are not significantly different across the two domains. In contrast, subjects exhibit a higher degree of risk aversion in the environmental domain. Furthermore, we corroborate earlier results, documenting that women are more risk averse than men in the monetary domain, and show this finding to also hold in the environmental domain.

Keywords: Risk and time; Discounting; Risk aversion; Domain differences; Environmental domain (search for similar items in EconPapers)
JEL-codes: C51 C91 D03 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (18)

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DOI: 10.1007/s11166-016-9245-8

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