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The development of risk aversion and prudence in Chinese children and adolescents

Heinrich, T.; Shachat, J.

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Authors

T. Heinrich



Abstract

This study experimentally evaluates the risk preferences of children and adolescents living in an urban Chinese environment. We use a simple binary choice task that tests risk aversion, as well as prudence. This is the first test for prudence in children and adolescents. Our results reveal that subjects from grades 5 to 11 (10 to 17 years) make mostly risk-averse and prudent choices. The choices of 3rd graders (8 to 9 years) do not differ statistically from risk neutral benchmarks, but at the same time they make mostly prudent choices. We also find evidence for a transmission of risk preferences. There is positive correlation between all children’s and their parents’ tendency to make risk-averse choices. There is also positive correlation between girls’ and their parents’ tendency to make prudent choices.

Citation

Heinrich, T., & Shachat, J. (2020). The development of risk aversion and prudence in Chinese children and adolescents. Journal of Risk and Uncertainty, 61(3), 263-287. https://doi.org/10.1007/s11166-020-09340-7

Journal Article Type Article
Acceptance Date Sep 16, 2020
Publication Date 2020-12
Deposit Date Nov 23, 2020
Publicly Available Date Apr 15, 2021
Journal Journal of Risk and Uncertainty
Print ISSN 0895-5646
Electronic ISSN 1573-0476
Publisher Springer
Peer Reviewed Peer Reviewed
Volume 61
Issue 3
Pages 263-287
DOI https://doi.org/10.1007/s11166-020-09340-7
Public URL https://durham-repository.worktribe.com/output/1256779

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Publisher Licence URL
http://creativecommons.org/licenses/by/4.0/

Copyright Statement
This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.






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