Peer Effects in Risk Aversion

Ana Balsa, Nestor Gandelman and Nicolás González-Pampillón ()

Risk Analysis, 2015, vol. 35, issue 1, 27-43

Abstract: We estimate peer effects in risk attitudes in a sample of high school students. Relative risk aversion is elicited from surveys administered at school. Identification of peer effects is based on parents not being able to choose the class within the school of their choice, and on the use of instrumental variables conditional on school‐grade fixed effects. We find a significant and quantitatively large impact of peers’ risk attitudes on a male individual's coefficient of risk aversion. Specifically, a one standard deviation increase in the group's coefficient of risk aversion increases an individual's risk aversion by 43%. Our findings shed light on the origin and stability of risk attitudes and, more generally, on the determinants of economic preferences.

Date: 2015
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Citations: View citations in EconPapers (13)

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https://doi.org/10.1111/risa.12260

Related works:
Working Paper: Peer Effects in Risk Aversion (2012)
Working Paper: Peer effects in risk aversion (2012)
Working Paper: Peer Effects in Risk Aversion (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:riskan:v:35:y:2015:i:1:p:27-43

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