Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/235755
Authors: 
Meier, Armando N.
Year of Publication: 
2021
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research No. 1118
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
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 risk attitudes. Using a large panel data set, I identify happiness, anger, and fear as significant correlates of within-person changes in risk attitudes. Robustness checks indicate a limited role of alternative explanations. An event study around the death of a parent or child further confirms a large relationship between emotions and risk attitudes.
Subjects: 
Emotions
happiness
risk attitudes
risk preferences
preference stability
SOEP
JEL: 
D01
D90
D91
Document Type: 
Working Paper

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