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Estimating Risk Attitudes in Denmark: A Field Experiment*

Authors


  • *

    Rutström thanks the U.S. National Science Foundation for research support under grants NSF/IIS 9817518 and NSF/POWRE 9973669, and Harrison and Rutström are grateful for support under grants NSF/HSD 0527675 and NSF/SES 0616746. Harrison and Lau thank the Danish Social Science Research Council for research support under project no. 24-02-0124. Steffen Andersen provided superb research assistance and comments throughout. We are grateful to Christian Gollier, John Hey, David Levine, Chris Starmer, Melonie Sullivan, Peter Wakker and three referees for comments. Supporting data, statistical code and experimental instructions are stored in the ExLab Digital Archive at http://exlab.bus.ucf.edu.

Abstract

We estimate individual risk attitudes using controlled experiments in the field in Denmark. The experiments were carried out across Denmark using a representative sample of 253 people between 19 and 75 years of age. Risk attitudes are estimated for various individuals differentiated by socio-demographic characteristics. Our results indicate that the average Dane is risk averse, and that risk neutrality is an inappropriate assumption to apply. We also find that risk attitudes vary significantly with respect to several important socio-demographic variables such as age and education. However, we do not find any effect of sex on risk attitudes.

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