Thomas Dohmen, Armin Falk, Bart Golsteyn, David Huffman, Uwe Sunde, 21 January 2018

Many developed countries have ageing populations, with potentially major economic, political, and social consequences in the near future. Using Dutch and German panel data to control for cohort and period effects, this column investigates the relationship between age and risk attitudes. The results suggest that willingness to take risks declines with age, implying that societies may become more risk-averse as their population ages.

Graham Loomes, Ganna Pogrebna, 02 August 2014

Researchers use various measures of individual risk attitudes to help explain a wide variety of economic behaviours, including investment decisions and firms’ entry and exit decisions. This column presents recent evidence showing that such measures are very context-specific and need to be used with caution, since the very same people can sometimes appear to be risk taking and sometimes appear to be risk averse, depending on the specific measure used. These discrepancies may arise because people have imprecise preferences under risk, and their responses are liable to be influenced by the particular methods used to elicit them.

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