Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/87815 
Year of Publication: 
2012
Series/Report no.: 
Development Research Working Paper Series No. 11/2012
Publisher: 
Institute for Advanced Development Studies (INESAD), La Paz
Abstract: 
Using data on Uruguayan adolescents, we estimate peer effects in risk attitudes. Relative risk aversion is elicited in an experimental setting. Identification is based on parents not being able to choose the class within the school of their choice. After controlling for school-grade fixed effect and addressing endogeneity due to simultaneity, we find a significant and quantitative large impact of peers on individuals risk aversion. An increase in one standard deviation of the group risk aversion produces an increase in 44-64% on an individual risk aversion. These findings enhance the importance of multiplicative effects related to risk behavior.
Subjects: 
risk aversion
peer effects
instrumental variables
JEL: 
I12
D1
Document Type: 
Working Paper

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