Growth, entrepreneurship, and risk-tolerance: a risk-income paradox

Bouchouicha, R. and Vieider, F. M. (2019) Growth, entrepreneurship, and risk-tolerance: a risk-income paradox. Journal of Economic Growth. ISSN 1573-7020 doi: 10.1007/s10887-019-09168-0

Abstract/Summary

Recent papers have modeled the prevalence of risk-tolerance as shaped by growth, making testable predictions about the distribution of risk-tolerance across the globe. We test these predictions using a dataset containing a survey question capturing people’s risk-tolerance for representative samples from 78 countries. We find a negative between-country correlation between risk-tolerance and GDP per capita. Together with the positive within-country correlation between risk-tolerance and income, this results in a risk-income paradox. We further find a negative interaction effect of risk-tolerance and GDP on fertility. These findings provide support for endogenous-preference models of economic growth.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/83787
Identification Number/DOI	10.1007/s10887-019-09168-0
Refereed	Yes
Divisions	Henley Business School > Real Estate and Planning
Publisher	Springer
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