the internal margin, i.e., the strength, of loss aversion, and empirically study the relation between income risk …-income population of Bogotá, characterized by limited financial education and subject to substantial income risk. In line with the … theoretical predictions, we find that an increase in income risk is associated with higher savings for loss-averse individuals …

empirically study the relation between income risk, experimentally elicited loss aversion, and precautionary savings. We do so … subject to substantial income risk. In line with the theoretical predictions, we find that an increase in income risk is … aversion. An accompanying laboratory experiment confirms that an exogenous increase in income risk causally leads to this …

Households face earnings risk which is non-normal and varies by age and over the income distribution. We show that … assets. Because households are subject to more background risk than previously considered, the estimated model implies a … substantially lower coefficient of risk aversion. We also find renewed support for rule-of-thumb investment strategies under the …

We show that household heads with a strong internal economic locus of control are more likely to hold equity and hold a … this relation is driven by a link between internal economic locus of control and a lower perception of the risk of …

risk reduces the propensity to invest in stocks. However, when controlling for household heterogeneity as well as … theory suggests that with increasing labor income risk, the reluctance of households to hold stocks increases. We propose to … measure income risk as the observed variation of household income over a five year period. We find that indeed higher income …

Online Appendix for “Ambiguity Aversion and Household Portfolio Choice Puzzles: Empirical Evidence” …

We test the relation between ambiguity aversion and five household portfolio choice puzzles: non-participation in … representative U.S. household survey, we measure ambiguity preferences using custom-designed questions based on Ellsberg urns. As … theory predicts, ambiguity aversion is negatively associated with stock market participation, the fraction of financial …

We test the relation between ambiguity aversion and five household portfolio choice puzzles: non-participation in … representative U.S. household survey, we measure ambiguity preferences using custom-designed questions based on Ellsberg urns. As … theory predicts, ambiguity aversion is negatively associated with stock market participation, the fraction of financial …

models of risk preferences — including both expected utility (EU) theory and non-EU models — that have been estimated using …We survey the literature on estimating risk preferences using field data. We concentrate our attention on studies in … which risk preferences are the focal object and estimating their structure is the core enterprise. We review a number of …

risk aversion, we find that objective financial literacy is positively related to investment in risky assets as well as …