American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Emotions and Risk Attitudes
American Economic Journal: Applied Economics
vol. 14,
no. 3, July 2022
(pp. 527–58)
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 dataset, I identify happiness, anger, and fear as significant correlates of within-person changes in risk attitudes. Robustness checks indicate a limited role for alternative explanations. An event study around the death of a parent or child further confirms a large relationship between emotions and risk attitudes.Citation
Meier, Armando N. 2022. "Emotions and Risk Attitudes." American Economic Journal: Applied Economics 14 (3): 527–58. DOI: 10.1257/app.20200164Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D81 Criteria for Decision-Making under Risk and Uncertainty
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- I31 General Welfare; Well-Being