Mapping Risk Aversion in Norway Using Hypothetical Income Gambles

Using choices among hypothetical income lotteries from respondents to a large Norwegian survey, we analyse the association between attitudes towards risks and socio-economic characteristics by means of an ordered probit model. Next, we impute a risk aversion measure to every respondent and use this to estimate the correlation with observed risky behaviour. Under the additional assumption of CRRA preferences, the sample average for the coefficient of relative risk aversion is 3.7 with a standard deviation of 2.2, re ecting strong heterogeneity of risk preferences. We fi nd signi cant correlations between the imputed measure of risk aversion and choices regarding life style, labour market and financial market