Higher order risk attitudes, demographics, and financial decisions.

Autor/inn/en	Noussair, Charles N.; Trautmann, Stefan T.; Kuilen, Gijs van de
Titel	Higher order risk attitudes, demographics, and financial decisions.
Quelle	Tilburg: Center for Economic Research (2011), 42 S., 483 KB PDF als Volltext kostenfreie Datei Link als defekt meldenVerfügbarkeit
Reihe	Discussion Paper / CentER for Economic Research. 2011,55
Beigaben	Illustrationen
Sprache	englisch; englische Zusammenfassung
Dokumenttyp	online; Monographie; Graue Literatur
URN	urn:nbn:nl:ui:12-4742723
Schlagwörter	Abneigung; Test; Management; Risiko; Student; Test; Tilburg; Management; Arbeitspapier; Portfolio; Risiko; Student; Tilburg
Abstract	We conduct an experiment to study the prevalence of the higher order risk attitudes of prudence and temperance, in a large demographically representative sample, as well as in a sample of undergraduate students. Participants make pairwise choices between lotteries of the form proposed by Eeckhoudt and Schlesinger (2006). The choices in these lotteries isolate prudent from imprudent, and temperate from intemperate, behavior. We relate individuals' risk aversion, prudence, and temperance levels to demographics and financial decisions. We observe that the majority of individuals' decisions are consistent with risk aversion, prudence, and temperance, in both the student and the demographically representative sample. An individual's level of prudence is predictive of his wealth, saving, and borrowing behavior outside of the experiment, while temperance predicts the riskiness of portfolio choices. Our findings suggest that the coefficient of relative prudence for a representative individual is approximately equal to two.
Erfasst von	ZBW - Leibniz-Informationszentrum Wirtschaft, Kiel
Update	2012/1