Are risk attitudes fixed factors or fleeting feelings?
In Soo Cho,
Peter Orazem and
Tanya Rosenblat
ISU General Staff Papers from Iowa State University, Department of Economics
Abstract:
We investigate the stability of measured risk attitudes over time, using a 13-year longitudinal sample of individuals in the NLSY79. We find that an individual's risk aversion changes systematically in response to personal economic circumstances. Risk aversion increases with lengthening spells of employment and time out of labor force, and decreases with lengthening unemployment spells. However, the most important result is that the majority of the variation in risk aversion is due to changes in measured individual tastes over time and not to variation across individuals. These findings that measured risk preferences are endogenous and subject to substantial measurement errors suggest caution in interpreting coefficients in models relying on contemporaneous, one-time measures of risk preferences.
Date: 2013-01-10
References: Add references at CitEc
Citations:
Downloads: (external link)
https://dr.lib.iastate.edu/server/api/core/bitstre ... 88868891cbad/content
Related works:
Journal Article: Are Risk Attitudes Fixed Factors or Fleeting Feelings? (2018) 
Working Paper: Are Risk Attitudes Fixed Factors or Fleeting Feelings? (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:isu:genstf:201301100800001038
Access Statistics for this paper
More papers in ISU General Staff Papers from Iowa State University, Department of Economics Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070. Contact information at EDIRC.
Bibliographic data for series maintained by Curtis Balmer (econwebmaster@iastate.edu).