Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/201563
Authors: 
Meier, Armando N.
Year of Publication: 
2019
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 1041
Abstract: 
Previous work has shown that preferences are not always stable across time, but surprisingly little is known about the reasons for this instability. I examine whether variation in people's emotions over time predicts changes in preferences. Using a large panel data set, I find that within-person changes in happiness, anger, and fear have substantial effects on risk attitudes and patience. Robustness checks indicate a limited role of alternative explanations. I further address potential endogeneity concerns by exploiting information about the death of a parent or child. This identification strategy confirms a large causal impact of emotions on preferences.
Subjects: 
emotions
risk attitudes
patience
risk preferences
time preferences
JEL: 
D01
D90
D91
Document Type: 
Working Paper

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