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Title:Happiness as a driver of risk-avoiding behavior PDF Logo
Authors:Goudie, Robert J. B.
Mukherjee, Sach
De Neve, Jan-Emmanuel
Oswald, Andrew J.
Wu, Stephen
Issue Date:2011
Series/Report no.:CESifo working paper: Behavioural Economics 3451
Abstract:Understanding the reasons why individuals take risks, particularly unnecessary risks, remains an important question in economics. We provide the first evidence of a powerful connection between happiness and risk-avoidance. Using data on 300,000 Americans, we demonstrate that happier individuals wear seatbelts more frequently. This result is obtained with five different methodological approaches, including Bayesian model-selection and an instrumented analysis based on unhappiness through widowhood. Independent longitudinal data corroborate the finding, showing that happiness is predictive of future motor vehicle accidents. Our results are consistent with a rational-choice explanation: happy people value life and thus act to preserve it.
Subjects:risk preferences
seatbelt usage
vehicle accidents
subjective well-being
happiness
JEL:C30
D60
D81
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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