How Do Households Allocate Risk?

Christoph Engel, Alexandra Fedorets and Olga Gorelkina

No 1000, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: Individuals often have to decide to which degree of risk they want to expose others, or how much risk to accept if their choice has an externality on third parties. One typical application is a household. We run an experiment in the German Socio-Economic Panel with two members from 494 households. Participants have a good estimate of each other’s risk preferences, even if not explicitly informed. They do not simply match this preference when deciding on behalf of the other household member, but shy away from exposing others to risk. We model the situation, and we find four distinct types of individuals, and two distinct types of households.

Keywords: risk preference; household; reticence to expose others to risk; trade-off between individual and foreign risk preference (search for similar items in EconPapers)
JEL-codes: C45 D13 D81 D91 (search for similar items in EconPapers)
Pages: 32 p.
Date: 2018
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-dem, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.diw.de/documents/publikationen/73/diw_01.c.611690.de/diw_sp1000.pdf (application/pdf)

Related works:
Working Paper: How Do Households Allocate Risk? (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp1000

Access Statistics for this paper

More papers in SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP) Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek ().