Are risk aversion and impatience related to cognitive ability?

This paper investigates whether there is a link between cognitive ability, risk aversion, and impatience, using a representative sample of roughly 1,000 German adults. Subjects participate in choice experiments with monetary incentives measuring risk aversion, and impatience over an annual horizon,...

Full description

Saved in:
Bibliographic Details
Published in:The American economic review 2010-06, Vol.100 (3), p.1238-1260
Main Authors: Dohmen, Thomas, Falk, Armin, Huffman, David, Sunde, Uwe
Format: Article
Language:English
Subjects:
Ability tests
Behavioral economics
Bildungsniveau
Children
Cognition
Cognition & reasoning
Cognitive ability
Conferences
Correlation analysis
Decision making
Deutschland
Economic models
Economic theory
Education
Educational attainment
Experiments
Income
Kognition
Liquidity
Lotteries
Measurement
Monetary incentives
P values
Payments
Personality traits
Präferenz
Questionnaires
Risiko
Risk
Risk aversion
Risk aversion preference
Shorter Papers
Studies
Verhalten
Western Europe
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper investigates whether there is a link between cognitive ability, risk aversion, and impatience, using a representative sample of roughly 1,000 German adults. Subjects participate in choice experiments with monetary incentives measuring risk aversion, and impatience over an annual horizon, and conduct two different, widely used, tests of cognitive ability. We find that lower cognitive ability is associated with greater risk aversion, and more pronounced impatience. These relationships are significant, and robust to controlling for personal characteristics, education, income, and measures of credit constraints. We perform a series of additional robustness checks, which help rule out other possible confounds. [PUBLICATION ABSTRACT]
ISSN:0002-8282
1944-7981
DOI:10.1257/aer.100.3.1238