Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5102177 | The North American Journal of Economics and Finance | 2017 | 16 Pages |
Abstract
State and Wealth dependence of individual financial risk preferences are investigated using Italian longitudinal data. Severance pay investments of private sector employees are used to elicit risk aversion. The identification strategy relies on (i) the behavior of workers changing job contract because of legal limits imposed to fixed-term contract renewal; (ii) the presence of different income prospects and employment protection from the risk of layoff associated to different labor arrangements. Fixed-Effects estimates show that financial investments - and consequently risk preferences - are not affected by expected wealth modifications. Conversely, employment protection determines risk attitude pointing for the existence of state-dependent relative risk aversion as regards financial investment decisions.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Patrizia Ordine, Giuseppe Rose,