Measuring multivariate risk preferences in the health domain
We investigate univariate and multivariate risk preferences for health (longevity) and wealth. We measure attitudes toward correlation and attitudes toward higher order dependence structures such as cross-prudence and cross-temperance, making use of the risk apportionment technique proposed by Eeckhoudt et al. (2007).
For multivariate gains, we find correlation aversion and cross-prudence in longevity and wealth. For losses, we observe correlation seeking and cross-imprudence. We do not find clear evidence for cross-temperance.
Our results indicate that longevity and wealth are considered to be substitutes for gains, but not for losses.
Second, univariate (higher order) risk preferences are comparable for longevity and wealth, although somewhat closer to linearity for wealth.
Third, we find evidence that attitudes toward dependence structures in the health domain are sign-dependent.
|Keywords||Multivariate risk attitudes, Health, Prudence, Temperance|
|JEL||Economic Methodology (jel B41), Intertemporal Choice and Growth: General (jel D90), Health: General (jel I10)|
|Persistent URL||dx.doi.org/10.1016/j.jhealeco.2018.12.004, hdl.handle.net/1765/114296|
|Journal||Journal of Health Economics|
Attema, A.E, L'Haridon, O, & van de Kuilen, G. (2018). Measuring multivariate risk preferences in the health domain. Journal of Health Economics, 64, 15–24. doi:10.1016/j.jhealeco.2018.12.004