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Title:Risk attitudes, development, and growth: Macroeconomic evidence from experiments in 30 countries PDF Logo
Authors:Vieider, Ferdinand M.
Chmura, Thorsten
Martinsson, Peter
Issue Date:2012
Series/Report no.:WZB Discussion Paper SP II 2012-401
Abstract:We measure risk attitudes in 30 different countries in a controlled, incentivized experiment (N = 3025). At the macroeconomic level, we find a strong and highly significant negative correlation between the risk tolerance of a country and income per capita. This gives rise to a paradox, seen that risk tolerance has been found to be positively associated with personal income within countries. We show that this paradox can be explained by unified growth theory. These results are consistent with the prediction that risk attitudes act as a transmission mechanism for growth by encouraging entrepreneurship. Furthermore, our study shows that risk attitudes vary considerably between countries and that for typical experimental stakes, risk seeking or neutrality is just as frequent as risk aversion.
Subjects:risk attitudes
cultural comparison
economic growth
comparative development
JEL:D01
D03
D81
E02
O10
O11
O12
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des WZB
Discussion Papers, WZB Junior Research Group Risk and Development, WZB

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