title: How General are Risk Preferences? Choices under Uncertainty in Different Domains.
abstract: We analyze the extent to which individuals' choices over five employer-provided insurance coverage decisions and one 401(k) investment decision exhibit systematic patterns, as would be implied by a general utility component of risk preferences. We provide evidence consistent with an important domain-general component that operates across all insurance choices. We find a considerably weaker relationship between one's insurance decisions and 401(k) asset allocation, although this relationship appears larger for more "financially sophisticated" individuals. Estimates from a stylized coverage choice model suggest that up to thirty percent of our sample makes choices that may be consistent across all six domains.
authors.affiliation: Department of Economics, Stanford University, and NBER, leinav@stanford.edu.
authors.forename: Liran
authors.initials: L
authors.lastname: Einav
authors.affiliation: Department of Economics, MIT, and NBER, afink@mit.edu.
authors.forename: Amy
authors.initials: A
authors.lastname: Finkelstein
authors.affiliation: Department of Economics, MIT, iuli@mit.edu.
authors.forename: Iuliana
authors.initials: I
authors.lastname: Pascu
authors.affiliation: Department of Internal Medicine, School of Medicine, Stanford University, mrcullen@stanford.edu .
authors.forename: Mark R
authors.initials: MR
authors.lastname: Cullen
keywords: Insurance; Portfolio choice; Risk aversion; Uncertainty