Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311945 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 17506
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
The purpose of this paper is to provide a general proposition of the relationship between altruism and risk taking. As explained in the body of the paper, we diverge from a result reported in Stark et al. (2022) and provide an expansion and a generalization of a preliminary result reported in Stark (2024). In a broad utility framework, we study the risk aversion of an altruistic person who is an active donor (benefactor) and the risk aversion of a beneficiary of an altruistic transfer. In both cases, we find that altruism lowers risk aversion. The specific case in which the utility functions of the benefactor and of the beneficiary are constant relative risk aversion (CRRA) functions constitutes a vivid example of lesser risk aversion characterization. We conclude that in terms of risk-taking behavior, a "population" endowed with altruism is uniformly more willing to take risks than a comparable "population" devoid of altruism.
Subjects: 
altruism
altruistic transfers
the absolute risk aversion of a practicing altruistic person
intensity of altruism
variation in risk-taking preferences
the absolute risk aversion of a beneficiary of an altruistic transfer
JEL: 
D01
D64
D81
G41
Document Type: 
Working Paper

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