Estimating Risk Preferences in the Field

Authors

Levon Barseghyan, Cornell UniversityFollow
Francesca Molinari, Cornell UniversityFollow
Ted O'Donoghue, Cornell UniversityFollow
Joshua C. Teitelbaum, Georgetown University Law CenterFollow

Document Type

Article

Publication Date

2018

Abstract

We survey the literature on estimating risk preferences using field data. We concentrate our attention on studies in which risk preferences are the focal object and estimating their structure is the core enterprise. We review a number of models of risk preferences—including both expected utility (EU) theory and non-EU models—that have been estimated using field data, and we highlight issues related to identification and estimation of such models using field data. We then survey the literature, giving separate treatment to research that uses individual-level data (e.g., property insurance data) and research that uses aggregate data (e.g., betting market data). We conclude by discussing directions for future research.

Publication Citation

Levon Barseghyan, Francesca Molinari, Ted O'Donoghue & Joshua C. Teitelbaum, Estimating Risk Preferences in the Field, 56 J. Econ. Literature 501-564 (2018)

Scholarly Commons Citation

Barseghyan, Levon; Molinari, Francesca; O'Donoghue, Ted; and Teitelbaum, Joshua C., "Estimating Risk Preferences in the Field" (2018). Georgetown Law Faculty Publications and Other Works. 1790.
https://scholarship.law.georgetown.edu/facpub/1790