Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/193351
Authors: 
De Blasio, Guido
De Paola, Maria
Poy, Samuele
Scoppa, Vincenzo
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers 12057
Abstract: 
This paper investigates the impact of risk attitudes on the decision to become an entrepreneur. In contrast to previous research, we handle endogeneity issues relying on an instrumental variables strategy considering as a source of exogenous variation in risk aversion the early exposure to a massive earthquake. Using several waves of the Bank of Italy Survey of Household Income and Wealth (SHIW), we find that individuals experiencing an earthquake become significantly more risk averse. Second-stage estimates show that risk aversion has a significant negative impact on the probability of becoming an entrepreneur.
Subjects: 
entrepreneurship
risk attitudes
natural disasters
instrumental variables
JEL: 
D81
D91
L26
C36
Document Type: 
Working Paper

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