Experimental and survey studies (Barsky et al., 1997; Cramer et al., 2002; Ekelund et al., 2005 among others) have found evidence that being self-employed is negatively associated with risk aversion, interpreting the causality relationship as going from the latter to the former. We present a test of a variant of this hypothesis, namely that employees whose incomes have a variable component display lower risk aversion with respect to fixed-income employees. This hypothesis was tested on a sample of 258 Italians aged between twenty-five and forty in the course of a survey study on consumption and saving attitudes and behaviour. Individuals interviewed in the course of the study are classified according to four levels of risk aversion, following Barsky et al. (1997). We find strong support for the hypothesis: the probability of being a variable income earner significantly decreases with risk aversion.
Linking Occupational Status, Type of Income and Risk Aversion
MUSUMECI, ROSY
2008-01-01
Abstract
Experimental and survey studies (Barsky et al., 1997; Cramer et al., 2002; Ekelund et al., 2005 among others) have found evidence that being self-employed is negatively associated with risk aversion, interpreting the causality relationship as going from the latter to the former. We present a test of a variant of this hypothesis, namely that employees whose incomes have a variable component display lower risk aversion with respect to fixed-income employees. This hypothesis was tested on a sample of 258 Italians aged between twenty-five and forty in the course of a survey study on consumption and saving attitudes and behaviour. Individuals interviewed in the course of the study are classified according to four levels of risk aversion, following Barsky et al. (1997). We find strong support for the hypothesis: the probability of being a variable income earner significantly decreases with risk aversion.
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