An empirical analysis of risk-taking in car driving and other aspects of life

The link between risk-taking behavior in various aspects of life has long been an area of debate among economists and psychologists. Using an extensive data set from Denmark, this study provides an empirical investigation of the link between risky driving and risk taking in other aspects of life, including risk-taking behavior in financial and labor-market decisions. Specifically, we establish significant positive correlations between individuals' risk-taking behavior in car driving and their risk-taking behavior in financial and labor-market decisions. However, we find that the strength of these correlations vary significantly between genders, and across risk decisions. These correlations and their differences across genders get stronger when we construct more “homogenous” groups by restricting our sample to those individuals with at least some stock-market participation. Overall, the empirical results in this study suggest that risk-taking behavior in various aspects of life can be associated, and our results corroborate previous evidence on the link between individuals' risk preferences across various aspects of life. This implies that individuals' driving behavior, which is commonly unobservable, can be more fully understood using observable labor market and financial decisions of individuals.