Heterogeneity in Risky Choice Behavior in a Broad Population
Hans-Martin von Gaudecker (),
Arthur van Soest () and
Erik Wengström ()
No 2009-12, Discussion Paper from Tilburg University, Center for Economic Research
We analyse risk preferences using an experiment with real incentives in a representative sample of 1,422 Dutch respondents. Our econometric model incorporates four structural parameters that vary with observed and unobserved characteristics: Utility curvature, loss aversion, preferences towards the timing of uncertainty resolution, and the propensity to choose randomly rather than on the basis of preferences. We find that all four parameters contribute to explaining choice behaviour. The structural parameters are significantly associated with socio-economic variables, but it is essential to incorporate unobserved heterogeneity in each of them to match the rich variety of choice patterns in the data.
Keywords: risk aversion; loss aversion; uncertainty resolution; field experiments (search for similar items in EconPapers)
JEL-codes: C90 D81 (search for similar items in EconPapers)
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Journal Article: Heterogeneity in Risky Choice Behavior in a Broad Population (2011)
Working Paper: Heterogeneity in Risky Choice Behaviour in a Broad Population (2009)
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