Arbeitspapier

Emotions and risk attitudes

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 data set, I identify happiness, anger, and fear as significant correlates of within-person changes in risk attitudes. Robustness checks indicate a limited role of alternative explanations. An event study around the death of a parent or child further confirms a large relationship between emotions and risk attitudes.

Language: Englisch

Bibliographic citation: Series: SOEPpapers on Multidisciplinary Panel Data Research ; No. 1118

Classification: Wirtschaft
Microeconomic Behavior: Underlying Principles
Micro-Based Behavioral Economics: General‡
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡

Subject: Emotions
happiness
risk attitudes
risk preferences
preference stability
SOEP

Event: Geistige Schöpfung

(who): Meier, Armando N.

Event: Veröffentlichung

(who): Deutsches Institut für Wirtschaftsforschung (DIW)

(where): Berlin

(when): 2021

Handle: http://hdl.handle.net/10419/235755

Last update: 10.03.2025, 11:44 AM CET

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Object type

Arbeitspapier

Associated

Meier, Armando N.
Deutsches Institut für Wirtschaftsforschung (DIW)

Time of origin

2021

Other Objects (12)

Arbeitspapier

Emotions, risk attitudes, and patience