We extend the canonical income process with persistent and transitory risk to shock distributions with left …-skewness and excess kurtosis, to which we refer as higher-order risk. We estimate our extended income process by GMM for household … show that in a standard incomplete-markets life-cycle model, first, higher-order risk has sizable welfare implications …

We analyze the impact of interim ranking on the risk taking and performance behaviour of professional athletes … of the riskiness of their choices. We present two key findings. First, risk taking exhibits an inverted-U relationship … with rank: risk taking increases up to rank six, but athletes then revert to safer strategies towards the bottom of the …

Using German panel data, we assess the causal effect of job loss, and thus of an extensive income shock, on risk … attitude. In line with predictions of expected utility reasoning about absolute risk aversion, losing oneś job reduces the … perceives the threat of job loss and is of a transitory nature. The change in stated risk attitude matches observable job …