In theory, both risk aversion and value of life year relative to income are mainly set by utility function concavity. However, as both also show puzzlingly large empirical variation, there is apparently a lot more going on than a simple context independent utility function. But what?
"Those with mid-level wages and extreme high or low wealth also seem more risk tolerant."
People with extremely low wealth: "I gotta try something!"People with extremely high wealth: "Even if I screw this up, I'll be fine. Why not take a swing at it?"People with moderate wealth: "I've got a good thing going. Better stay the course."
First, the self-employed are really more risk averse? How does the theory explain this?
Second, you've convinced me that age is the wrong way to carve out differences in risk-aversion, but why bundle whole individuals at all? It seems that we are each more risk-tolerant/inclined to own problems in some domains of our life than others. We need a more fine-grained set of correlates and contexts.
Third, do you see implications for politics? Perhaps for ideological preferences (e.g., democrat, republican, libertarian, authoritarian)? Or perhaps as a way to predict what sort of candidate will prove appealing at a particular historical moment (e.g., technocrat vs. populist, insider vs. outsider)?
Interesting essay. I'm curious: when you say "do we choose to act vulnerable but sympathetic, or do we choose to act “emotionally mature”", do you see a meaningful distinction between conscious choice and "evolution-encoded tendency to behave a certain way"?
I sometimes see a similar distinction when discussing a person's "choice" or "tendency" towards anger, vulnerability to offense, or even depression. For instance, I wonder if mainstream culture's acceptance of mental illnesses or depression might have changed the payoff calculus between "vulnerable but sympathetic" and "emotionally mature".
I write on topics I have something to say about.
Why not?
I purposely didn't distinguish which choices are made consciously
I didn't bundle whole individuals, but repeatedly talked about how each person's behavior depends on context.
"Those with mid-level wages and extreme high or low wealth also seem more risk tolerant."
People with extremely low wealth: "I gotta try something!"People with extremely high wealth: "Even if I screw this up, I'll be fine. Why not take a swing at it?"People with moderate wealth: "I've got a good thing going. Better stay the course."
First, the self-employed are really more risk averse? How does the theory explain this?
Second, you've convinced me that age is the wrong way to carve out differences in risk-aversion, but why bundle whole individuals at all? It seems that we are each more risk-tolerant/inclined to own problems in some domains of our life than others. We need a more fine-grained set of correlates and contexts.
Third, do you see implications for politics? Perhaps for ideological preferences (e.g., democrat, republican, libertarian, authoritarian)? Or perhaps as a way to predict what sort of candidate will prove appealing at a particular historical moment (e.g., technocrat vs. populist, insider vs. outsider)?
I'm surprised you didn't link to your co-author Kevin Simler's blog post on the sociobiology of tears.
Interesting essay. I'm curious: when you say "do we choose to act vulnerable but sympathetic, or do we choose to act “emotionally mature”", do you see a meaningful distinction between conscious choice and "evolution-encoded tendency to behave a certain way"?
I sometimes see a similar distinction when discussing a person's "choice" or "tendency" towards anger, vulnerability to offense, or even depression. For instance, I wonder if mainstream culture's acceptance of mental illnesses or depression might have changed the payoff calculus between "vulnerable but sympathetic" and "emotionally mature".