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

PSC In The News

RSS Feed icon

Seefeldt criticizes Kansas legislation restricting daily cash withdrawals from public assistance funds

Prescott says sex offender registries may increase recidivism by making offender re-assimilation impossible

Frey says rising numbers of younger minority voters mean Republicans must focus on fiscal not social issues

Highlights

Elizabeth Bruch wins Robert Merton Prize for paper in analytic sociology

Elizabeth Bruch wins ASA award for paper in mathematical sociology

Spring 2015 PSC newletter available now

Formal demography workshop and conference at UC Berkeley, August 17-21

Next Brown Bag

PSC Brown Bags will be back fall 2015


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