Risk aversion and wealth
Subtitle: evidence from person-to-person lending portfolios
By: Daniel Paravisini, Veronica Rappoport, Enrichetta Ravina
Contributors: Rappoport, Veronica; Ravina, Enrichetta; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16063; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16063.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "We estimate risk aversion from the actual financial decisions of 2,168 investors in Lending Club (LC), a person-to-person lending platform.  We obtain risk preference parameters of similar magnitude and heterogeneity across investors than those in experimental studies.  Using house prices as an indicator of investor wealth, we find that investors' willingness to take risk in LC is affected by their outside wealth: wealthier investors are more risk averse, but any given investor becomes more risk averse after a negative wealth shock.  These wealth elasticities consistently extrapolate to other investor decisions"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/24/2010.

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