Explaining the characteristics of the power (CRRA) utility family

Peter Wakker

Health Economics, 2008, vol. 17, issue 12, 1329-1344

Abstract: The power family, also known as the family of constant relative risk aversion (CRRA), is the most widely used parametric family for fitting utility functions to data. Its characteristics have, however, been little understood, and have led to numerous misunderstandings. This paper explains these characteristics in a manner accessible to a wide audience. Copyright © 2008 John Wiley & Sons, Ltd.

Date: 2008
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https://doi.org/10.1002/hec.1331

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Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:17:y:2008:i:12:p:1329-1344

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