Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Miech on 'generational forgetting' about drug-use dangers

Impacts of H-1B visas: Lower prices and higher production - or lower wages and higher profits?

MTF data show 10% of 19-20 year-olds report bouts of drinking 10-plus alcoholic beverages

More News

Highlights

Call for papers: Conference on computational social science, April 2017, U-M

Sioban Harlow honored with 2017 Sarah Goddard Power Award for commitment to women's health

Post-doc fellowship in computational social science for summer or fall 2017, U-Penn

ICPSR Summer Program scholarships to support training in statistics, quantitative methods, research design, and data analysis

More Highlights

Next Brown Bag

Mon, Feb 13, 2017, noon:
Daniel Almirall, "Getting SMART about adaptive interventions"

Miles Kimball photo

Risk Preferences in the PSID: Individual Imputations and Family Covariation

Publication Abstract

Kimball, Miles, Claudia R. Sahm, and Matthew D. Shapiro. 2009. "Risk Preferences in the PSID: Individual Imputations and Family Covariation." American Economic Review, 99(2): 363-368.

Unobserved heterogeneity greatly complicates empirical analysis in economics. Unobserved heterogeneity in preferences is particularly troublesome because there are so few theoretical restrictions on the distribution of preference parameters in the population. Therefore, despite potential pitfalls, we have developed direct survey measures of preference parameters based on hypothetical choices and appropriate econometric techniques for dealing with the inevitable measurement error in any such measures. Our work on survey measures of preference parameters focuses on risk tolerance, time preference and the elasticity of intertemporal substitution and labor supply elasticities.

Risk tolerance is central to portfolio choice and many other economic decisions, such as choices about insurance and career choices. In this paper, we discuss how to go from categorical survey responses to imputed values of preference parameters. The procedure takes into account measurement error from survey response, and has implications for the appropriate use of imputed preference parameters in econometric analysis. We present the risk tolerance imputations for the survey responses in the Panel Study of Income Dynamics (PSID). We also present quantitative evidence on the covariation in risk preferences within families.

DOI:10.1257/aer.99.2.363 (Full Text)

PMCID: PMC2995549. (Pub Med Central)

Country of focus: United States of America.

Browse | Search : All Pubs | Next