Individual risk attitudes: Measurement, determinants, and behavioral consequences

Thomas Dohmen, Armin Falk, David Huffman, Uwe Sunde, Jürgen Schupp and Gert Wagner

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: This paper studies risk attitudes using a large representative survey and a complementary experiment conducted with a representative subject pool in subjects’ homes. Using a question asking people about their willingness to take risks \"in general\", we find that gender, age, height, and parental background have an economically significant impact on willingness to take risks. The experiment confirms the behavioral validity of this measure, using paid lottery choices. Turning to other questions about risk attitudes in specific contexts, we find similar results on the determinants of risk attitudes, and also shed light on the deeper question of stability of risk attitudes across contexts. We conduct a horse race of the ability of different measures to explain risky behaviors such as holdings stocks, occupational choice, and smoking. The question about risk taking in general generates the best all-round predictor of risky behavior.

Date: 2011
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Published in Journal of the European Economic Association 3 9(2011): pp. 522-550

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Related works:
Journal Article: INDIVIDUAL RISK ATTITUDES: MEASUREMENT, DETERMINANTS, AND BEHAVIORAL CONSEQUENCES (2011)
Working Paper: Individual risk attitudes: Measurement, determinants and behavioral consequences (2009)
Working Paper: Individual risk attitudes: measurement, determinants and behavioral consequences (2009)
Working Paper: Individual risk attitudes: measurement, determinants and behavioral consequences (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:20048

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