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Mental health changes and the willingness to take risks

Author

Listed:
  • Lu Li

    (Ludwig-Maximilians-Universitaet, Munich)

  • Andreas Richter

    (Ludwig-Maximilians-Universitaet, Munich)

  • Petra Steinorth

    (Universitaet Hamburg)

Abstract

Utilizing the longitudinal SOEP data representative of the German population, we find that mental health shocks significantly decrease the willingness to take risks. We also find that mental health improvements increase the willingness to take risks significantly. Our findings are relevant for better understanding the economic decision making of the large number of individuals with mental health issues.

Suggested Citation

  • Lu Li & Andreas Richter & Petra Steinorth, 2023. "Mental health changes and the willingness to take risks," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 48(1), pages 31-62, March.
    • Handle: RePEc:pal:genrir:v:48:y:2023:i:1:d:10.1057_s10713-021-00070-7
    DOI: 10.1057/s10713-021-00070-7
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    More about this item

    Keywords

    Willingness to take risks; Health shock; Health improvement; Mental health; SF-12;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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