Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2000-08-29
Number: 00-074/3
Author-Name: Joop Hartog
Author-Email: j.hartog@uva.nl
Author-Workplace-Name: University of Amsterdam
Author-Name: Ada Ferrer-i-Carbonell
Author-Email: a.ferrercarbonell@uva.nl
Author-Workplace-Name: University of Amsterdam
Author-Name: Nicole Jonker
Author-Email: nwonj@fee.uva.nl
Author-Workplace-Name: University of Amsterdam
Title: On a Simple Survey Measure of Individual Risk Aversion
Abstract: We ask individuals for their reservation price of a specified lotteryand deduce their Arrow-Pratt measure of risk aversion.This allows direct testing of common hypotheses on risk attitudes inthree datasets. We find that risk aversion indeed fallswith income and wealth. Entrepreneurs are less risk averse thanemployees, civil servants are more risk averse thanprivate sector employees, and women are more risk averse than men. Weanalyze six different specifications of the lotteryquestion in a single data set and find quite consistent results. Weconclude that a simple lottery question is a promisingsurvey instrument to extract differences in risk attitudes amongindividuals. 
Classification-JEL: D81; C81
File-Url: https://papers.tinbergen.nl/00074.pdf
File-Format: application/pdf
File-Size: 356787 bytes
Handle: RePEc:tin:wpaper:20000074