Table 8:
Risk Aversion
| Dep. Var: | Risk Aversion: Indicator | Risk Aversion categories | ||||
|---|---|---|---|---|---|---|
| Income | Inheritance | Business | Income | Inheritance | Business | |
| [1] | [2] | [3] | [4] | [5] | [6] | |
| EA Score | −0.022*** (0.007) | −0.004 (0.012) | −0.027** (0.011) | −0.045*** (0.015) | 0.017 (0.029) | −0.057** (0.027) |
| Obs. | 10512 | 2951 | 2912 | 10512 | 2951 | 2912 |
| R2 | 0.105 | 0.210 | 0.246 | |||
| Mean outcome | 0.39 | 0.51 | 0.47 | |||
| Standard Controls | X | X | X | X | X | X |
| Principal Comp. | X | X | X | X | X | X |
| Full Educ. Controls | X | X | X | X | X | X |
Notes: This table presents estimates from regressions of measures of individual risk tolerance on the EA score and various controls. Risk tolerance is elicited from questions based on risky gambles over labor income, inheritance wealth, and business wealth. In Columns [1]-[3], the dependent variable is an indicator that takes a value of 1 for individuals that never choose the risky option over a guaranteed outcome. In Columns [4]-[6] we report estimates from ordered probit models where the outcome is a categorical variable that takes one of six values depending on the riskiest gamble that an individual accepts, with higher values indicating greater risk aversion. Significance stars ***, **, and * indicate statistical significance at the 0.01, 0.05, and 0.10 levels, respectively. Standard errors are clustered at the family level.