Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/35555 
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers No. 4022
Publisher: 
Institute for the Study of Labor (IZA), Bonn
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: 
Document Type: 
Working Paper

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