Table 6.
Age, Cohort, and Time
| Latent Variable: Log of Risk Tolerance
| ||||
|---|---|---|---|---|
| Parameter | Alternate Specifications of Time Effects | |||
| Age |
−0.017 0.008 |
−0.16 (0.09) (0.00) |
−0.021 0.010 |
−0.021 0.010 |
| 1937–1941 Cohorts |
0.16 (0.06) |
0.17 (0.07) |
0.14 (0.07) |
0.14 (0.07) |
| 1942–1947 Cohorts | 0.16 (0.10) |
0.16 (0.11) (0.00) |
0.10 (0.12) |
0.10 (0.12) |
| Consumer Sentiment |
0.009 (0.002) |
0.006 (0.003) |
0.007 (0.004) |
|
| ICS Six Months Ago | 0.004 (0.003) |
|||
| ICS One Year Ago | −0.001 (0.003) |
|||
| 1994 HRS |
0.27 (0.08) |
0.19 (0.09) |
||
| 1998 HRS |
0.37 (0.08) |
0.19 (0.11) |
||
| 2000 HRS |
0.32 (0.11) |
0.12 (0.14) |
||
| 2002 HRS |
0.24 (0.11) |
0.17 (0.11) |
||
|
| ||||
| Log-likelihood | −23573.5 | −23571.5 | −23571.2 | −23569.0 |
|
| ||||
| Parameters | 55 | 59 | 59 | 61 |
NOTE: Asymptotic standard errors are in parentheses. Estimates in bold are statistically significant at the 5% level. The sample includes 12,003 individuals. The first column is the baseline specification of the model, see Appendix Table 1 for the full set of covariates and estimates. The 1931–1936 birth cohort is the omitted cohort group. Consumer Sentiment is the value of the University of Michigan Index of Consumer Sentiment (ICS) in the month of an individual’s gamble response. Over the months with HRS gamble responses, the ICS from the Survey of Consumers ranges from a low of 73.3 in October 1992 to high of 111.3 in February 2000. The models in the first two columns include a categorical control for a gamble response in the 1992 or 1994 HRS to capture differences due to the “new” job frame of the question.