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Survey measures of risk aversion and prudence

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  • Joseph Eisenhauer
  • Luigi Ventura

Abstract

This paper utilizes a thought experiment conducted by the Bank of Italy to estimate absolute and relative risk aversion along with absolute and relative prudence for a broad cross-section of Italian households. Upper and lower bounds are calculated for each parameter, and comparisons are made across socio-demographic groups. Evidence is found of decreasing absolute risk aversion, decreasing absolute prudence, increasing relative risk aversion, and increasing relative prudence.

Suggested Citation

  • Joseph Eisenhauer & Luigi Ventura, 2003. "Survey measures of risk aversion and prudence," Applied Economics, Taylor & Francis Journals, vol. 35(13), pages 1477-1484.
    • Handle: RePEc:taf:applec:v:35:y:2003:i:13:p:1477-1484
    DOI: 10.1080/0003684032000151287
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