Peer effects in risk aversion
Resumen:
Using data onUruguayan adolescents, we estimate peer effects in risk attitudes. Relative risk aversion is elicited in an experimental setting. Identification is based on parents not being able to choose the class within the school of their choice. After controlling for school-grade fixed effect andaddressingendogeneity due to simultaneity, we finda significant and quantitative large impact of peers on individuals risk aversion. An increase in one standard deviation of the group risk aversion produces anincrease in 44-64% on an individual risk aversion. These findings enhance the importance of multiplicative effects related to risk behavior.
| 2012 | |
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Risk aversion Peer effects Instrumental variables |
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| Inglés | |
| Universidad de Montevideo | |
| REDUM | |
| https://hdl.handle.net/20.500.12806/1322 | |
| Acceso abierto | |
| Attribution-NonCommercial-NoDerivatives 4.0 Internacional |
| Sumario: | Using data onUruguayan adolescents, we estimate peer effects in risk attitudes. Relative risk aversion is elicited in an experimental setting. Identification is based on parents not being able to choose the class within the school of their choice. After controlling for school-grade fixed effect andaddressingendogeneity due to simultaneity, we finda significant and quantitative large impact of peers on individuals risk aversion. An increase in one standard deviation of the group risk aversion produces anincrease in 44-64% on an individual risk aversion. These findings enhance the importance of multiplicative effects related to risk behavior. |
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