The evolution of risk attitudes: A panel study of the university years

Catherine Eckel (), Rick Wilson () and Nanyin Yang ()
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Catherine Eckel: Texas A&M University
Rick Wilson: Rice University
Nanyin Yang: University of Sydney

Journal of Risk and Uncertainty, 2025, vol. 70, issue 3, No 2, 225-248

Abstract: Abstract We analyze a unique longitudinal dataset of university students to investigate the stability of risk preferences over a five-year period. Our findings indicate that subjects’ risk tolerance, as measured by incentivized lottery choices, tends to increase over time, while it moves in the opposite direction when assessed through a non-incentivized survey question. Furthermore, we exploit the COVID-19 pandemic to explore the impact of negative experiences and emotions on the temporal changes in subjects’ risk preferences. Our analysis reveals that, within the same group of respondents, the risk tolerance elicited by the incentivized measure proves to be more stable, whereas the survey measure exhibits greater sensitivity, declining in response to negative shocks. These results enhance our understanding of how risk preferences evolve over time and emphasize the importance of employing appropriate measurement methods when investigating risk attitudes.

Keywords: Risk preferences; Incentivized and non-incentivized risk-preference measures; COVID-19; Emotions (search for similar items in EconPapers)
JEL-codes: C9 D81 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11166-025-09457-7

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