Risk Preferences of Australian Households: A Panel Study

Risk Preferences of Australian Households: A Panel Study

Author: zant worldpress

Using household panel data for Australia, sourced from HILDA, we test whether the hypothesis of constant relative risk aversion in wealth, controlling for various sociodemographic variables. Our measure of risk is based on the proportion of variance of the optimal household portfolio rather than the proportion of risky assets in the portfolio. Based on this measure, we apply a first differences model across three survey waves spanning 2002 to 2010. We find strong evidence that Australian households exhibit decreasing relative risk aversion in wealth rejecting the constant relative risk aversion hypothesis.This finding is robust in the presence of various sociodemographic variables, including education levels and liquidity constraints.

JEL Codes: D14, D81, G11

Total Reviews: 0


Delivery System

After completion purchase and payment you will get an email with download link of book. You can download this book within 24 hours. Be remember you can't download this book after 24 hours.


There are no reviews yet.

Be the first to review “Risk Preferences of Australian Households: A Panel Study”