title: Health shocks and risk aversion.
abstract: We empirically assess whether a health shock influences individual risk aversion. We use grip strength data to obtain an objective health shock indicator. In order to account for the non-random nature of our data regression-adjusted matching is employed. Risk preferences are traditionally assumed to be constant. However, we find that a health shock increases individual risk aversion. The finding is robust to a series of sensitivity analyses and persists for at least four years after the shock. Income changes do not seem to be the driving mechanism.
authors: University of Duisburg-Essen, Germany; CINCH Health Economics Research Center, Germany; Ruhr Graduate School in Economics (RGS Econ), Germany. Electronic address: simon.decker@uni-due.de.
authors: Simon
authors: S
authors: Decker
authors: CINCH Health Economics Research Center, Germany; University of Paderborn, Germany; RWI Essen, Germany.
authors: Hendrik
authors: H
authors: Schmitz
mesh_terms: D001362:Avoidance Learning; D006304:Health Status; D006801:Humans; D007182:Income; D012306:Risk; D012309:Risk-Taking
keywords: Hand grip strength; Health shocks; Objective health; Regression-adjusted matching; Risk preferences