Assimilation in the Risk Preferences of Spouses

Falco, Salvatore Di; Vieider, Ferdinand M.

doi:10.1111/ecin.12531

Cited by 15 publications

(7 citation statements)

References 37 publications

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“…This means that the increase in dependence seen in the comparison of the two parts of Table may be interpreted as clear evidence of “assimilation”: the two members of the couple become more similar in terms of risk attitude as their marriage progresses. This finding is in agreement with those of Di Falco and Vieider ().…”

Section: Application To the German Socio‐economic Panelsupporting

confidence: 94%

“…A very interesting hypothesis is that of assimilation: a process by which attitudes become more similar with years of marriage. Bacon, Conte, and Moffatt () found evidence of spousal correlation in risk attitude increasing with years of marriage, and Di Falco and Vieider (), using a sample of Ethiopian married couples, find that assimilation is more important than assortative matching in explaining risk attitudes. The hypothesis of assimilation will be investigated in this paper by estimating the copula model separately for different stages of marriage.…”

Section: Introductionmentioning

confidence: 99%

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Coupling Couples With Copulas: Analysis of Assortative Matching on Risk Attitude

Nikoloulopoulos

Moffatt

2018

Economic Inquiry

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We investigate patterns of assortative matching on risk attitude, using self‐reported (ordinal) data on risk attitudes for males and females within married couples, from the German Socio‐Economic Panel over the period 2004–2012. We apply a novel copula‐based bivariate panel ordinal model. Estimation is in two steps: first, a copula‐based Markov model is used to relate the marginal distribution of the response in different time periods, separately for males and females; second, another copula is used to couple the males' and females' conditional (on the past) distributions. We find positive dependence, both in the middle of the distribution, and in the joint tails, and we interpret this as positive assortative matching (PAM). Hence we reject standard assortative matching theories based on risk‐sharing assumptions, and favor models based on alternative assumptions such as the ability of agents to control income risk. We also find evidence of “assimilation”; that is, PAM appearing to increase with years of marriage. (JEL C33, C51, D81)

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Section: Application To the German Socio‐economic Panelsupporting

confidence: 94%

Section: Introductionmentioning

confidence: 99%

Coupling Couples With Copulas: Analysis of Assortative Matching on Risk Attitude

Nikoloulopoulos

Moffatt

2018

Economic Inquiry

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“…The results clearly showed that the rural samples showed similar risk attitudes to the Ethiopian student sample. At the same time, the rural Ethiopian population sample was found to be more risk tolerant than our Western samples (see also Vieider, Truong, Martinsson, and Pham Khanh ( forthcoming ) and Di Falco and Vieider (), for further evidence). This clearly rejects an explanation based on systematic selection.…”

Section: Resultsmentioning

confidence: 54%

All over the map: A worldwide comparison of risk preferences

l’Haridon¹,

Vieider²

2019

Quantitative Economics

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We obtain rich measurements of risk preferences for 2939 subjects across 30 countries, and use the data to paint a picture of the distribution of risk preferences across the globe using structural equation models. Reference-dependence and likelihood-dependence are found to be important everywhere. Model parameters in non-Western countries differ systematically from those in Western countries, with poorer countries substantially more risk tolerant than rich countries on average. We qualify previous findings on gender effects and cognitive ability by showing how they mainly impact likelihood-dependence. We further add novel evidence on the correlation between risk preferences and study major. Whereas we confirm previous results on observable characteristics of subjects explaining little of overall preference heterogeneity, a few macroeconomic indicators can explain a considerable part of the between-country heterogeneity.

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“…Studying 347 rural Ethiopian couples, Di Falco and Vieider (2016) show that spouses' risk preferences are not significantly different from those of their husbands (although female household heads are much more risk averse than male household heads). This is also consistent with a recent meta-analysis by Filippin and Crosetto (2015), who show that gender differences are task specific and may be weaker than thought.…”

Section: Subject Pool Characteristicsmentioning

confidence: 98%

Measuring Risk Preferences in Rural Ethiopia

Vieider

Beyene²,

Bluffstone

et al. 2018

Economic Development and Cultural Change

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Risk aversion has generally been found to decrease in income. This may lead one to expect that people in poor countries will be more risk averse than inhabitants of rich countries. Recent comparative findings with students suggest the opposite, potentially giving rise to a risk-income paradox. Findings with students, however, may result from selection effects. We test whether a paradox indeed exists by measuring the risk preferences of over 500 household heads across several regions in the highlands of Ethiopia. We do so using certainty equivalents, which are well suited to the task due to their simplicity. We find high degrees of risk tolerance, consistent with the evidence obtained for students using the same tasks. In particular, the level of risk tolerance is higher than the one found for student samples in most Western and even middle income countries. We also find risk tolerance to increase in income proxies within our sample, thus completing the paradox.

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Assimilation in the Risk Preferences of Spouses

Cited by 15 publications

References 37 publications

Coupling Couples With Copulas: Analysis of Assortative Matching on Risk Attitude

Coupling Couples With Copulas: Analysis of Assortative Matching on Risk Attitude

All over the map: A worldwide comparison of risk preferences

Measuring Risk Preferences in Rural Ethiopia

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