Estimating Risk Preferences in the Field
- (pp. 501-64)
Abstract
We survey the literature on estimating risk preferences using field data. We concentrate our attention on studies in which risk preferences are the focal object and estimating their structure is the core enterprise. We review a number of models of risk preferences—including both expected utility (EU) theory and non-EU models—that have been estimated using field data, and we highlight issues related to identification and estimation of such models using field data. We then survey the literature, giving separate treatment to research that uses individual-level data (e.g., property-insurance data) and research that uses aggregate data (e.g., betting-market data). We conclude by discussing directions for future research.Citation
Barseghyan, Levon, Francesca Molinari, Ted O'Donoghue, and Joshua C. Teitelbaum. 2018. "Estimating Risk Preferences in the Field." Journal of Economic Literature, 56 (2): 501-64. DOI: 10.1257/jel.20161148Additional Materials
JEL Classification
- C51 Model Construction and Estimation
- D11 Consumer Economics: Theory
- D81 Criteria for Decision-Making under Risk and Uncertainty
- D82 Asymmetric and Private Information; Mechanism Design
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- G22 Insurance; Insurance Companies; Actuarial Studies
- I13 Health Insurance, Public and Private