Do entrepreneurs consider the risk of their business equity when making investment portfolio allocations? Many people … compartmentalize different risks and consider them separately, called mental accounting. Alternatively, the risk substitution … hypothesis suggests that entrepreneurs would offset high business income risk by selecting a more conservative investment …

This paper investigates the impact of risk attitudes on the decision to become an entrepreneur. In contrast to previous … variation in risk aversion the early exposure to a massive earthquake. Using several waves of the Bank of Italy Survey of … Household Income and Wealth (SHIW), we find that individuals experiencing an earthquake become significantly more risk averse …