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Linking Measured Risk Aversion to Individual Characteristics

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  • Joop Hartog
  • Ada Ferrer‐i‐Carbonell
  • Nicole Jonker
Abstract
From the stated price of a specified lottery in three unrelated surveys we deduce individuals’ Arrow‐Pratt measure of risk aversion. We find that risk aversion indeed falls with income and wealth. Entrepreneurs are less risk averse than employees, civil servants are more risk averse than private sector employees, and women are more risk averse than men. A simple lottery question appears a promising survey instrument to explore risk attitude and its relation to personal characteristics.

Suggested Citation

  • Joop Hartog & Ada Ferrer‐i‐Carbonell & Nicole Jonker, 2002. "Linking Measured Risk Aversion to Individual Characteristics," Kyklos, Wiley Blackwell, vol. 55(1), pages 3-26.
    • Handle: RePEc:bla:kyklos:v:55:y:2002:i:1:p:3-26
    DOI: 10.1111/1467-6435.00175
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    References listed on IDEAS

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    5. John D. Hey & Chris Orme, 2018. "Investigating Generalizations Of Expected Utility Theory Using Experimental Data," World Scientific Book Chapters, in: Experiments in Economics Decision Making and Markets, chapter 3, pages 63-98, World Scientific Publishing Co. Pte. Ltd..
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