American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Emotions and Risk Attitudes
American Economic Journal: Applied Economics
(pp. 527–58)
Abstract
Previous work has shown that preferences are not always stable across time, but surprisingly little is known about the reasons for this instability. I examine whether variation in people's emotions over time predicts changes in risk attitudes. Using a large-panel dataset, I identify happiness, anger, and fear as significant correlates of within-person changes in risk attitudes. Robustness checks indicate a limited role for alternative explanations. An event study around the death of a parent or child further confirms a large relationship between emotions and risk attitudes.Citation
Meier, Armando N. 2022. "Emotions and Risk Attitudes." American Economic Journal: Applied Economics 14 (3): 527–58. DOI: 10.1257/app.20200164Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D81 Criteria for Decision-Making under Risk and Uncertainty
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- I31 General Welfare; Well-Being