Survey measures of risk aversion and prudence
Abstract:This paper utilizes a thought experiment conducted by the Bank of Italy to estimate absolute and relative risk aversion along with absolute and relative prudence for a broad cross-section of Italian households. Upper and lower bounds are calculated for each parameter, and comparisons are made across socio-demographic groups. Evidence is found of decreasing absolute risk aversion, decreasing absolute prudence, increasing relative risk aversion, and increasing relative prudence.
Document Type: Research Article
Affiliations: 1: Department of Economics and Finance, Canisius College, 2001 Main St., Buffalo NY 14208-1098 USA 2: Dipartimento di Scienze Economiche, Università di Roma-- La Sapienza, Via Cesalpino 12-14, 00161 Roma, Italy
Publication date: September 10, 2003