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Title:Heterogeneity in risky choice behaviour in a broad population PDF Logo
Authors:von Gaudecker, Hans-Martin
van Soest, Arthur
Wengström, Erik
Issue Date:2009
Series/Report no.:IZA discussion papers 4022
Abstract: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.
Subjects:Risk aversion
loss aversion
uncertainty resolution
field experiments
JEL:C90
D81
Persistent Identifier of the first edition:urn:nbn:de:101:1-20090304791
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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