Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129316
Authors: 
Decker, Simon
Schmitz, Hendrik
Year of Publication: 
2015
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 801
Abstract: 
Risk preferences are typically assumed to be constant for an individual across the life cycle. In this paper we empirically assess if they are time varying. Specifically, we analyse whether health shocks influence individual risk aversion. We follow an innovative approach and use grip strength data to obtain an objective health shock indicator. In order to account for the non-random nature of our data we employ regression-adjusted matching. Health shocks are found to increase individual risk aversion. The finding is robust to a series of sensitivity analyses.
Subjects: 
Risk Preferences
Health Shocks
Hand Grip Strength
Regression-Adjusted Matching
JEL: 
C81
D01
D81
I10
I12
Document Type: 
Working Paper

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