TY  - JOUR
AU  - Kimball,Miles S.
AU  - Sahm,Claudia R.
AU  - Shapiro,Matthew D.
TI  - Risk Preferences in the PSID: Individual Imputations and Family Covariation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14754
PY  - 2009
Y2  - February 2009
UR  - http://www.nber.org/papers/w14754
L1  - http://www.nber.org/papers/w14754.pdf
N1  - Author contact info:
Miles S. Kimball
Department of Economics
University of Michigan
Ann Arbor, MI  48109-1220
Tel: 734/764-2375
Fax: 734/764-2769
E-Mail: mkimball@umich.edu

Claudia R. Sahm
Federal Reserve Board
21st and C Street NW
Washington DC 20551
Tel: 571-490-2223
E-Mail: Claudia.R.Sahm@frb.gov

Matthew D. Shapiro
Department of Economics
University of Michigan
611 Tappan St
Ann Arbor, MI 48109-1220
Tel: 734/764-5419
Fax: 734 764-2769
E-Mail: shapiro@umich.edu
AB  - Survey measures of preference parameters provide a means for accounting for otherwise unobserved heterogeneity.This paper presents measures of relative risk tolerance based on responses to survey questions about hypothetical gambles over lifetime income.It discusses how to impute estimates of utility function parameters from the survey responses using a statistical model that accounts for survey response error.  There is substantial heterogeneity in true preference parameters even after survey response error is taken into account.The paper discusses how to use the preference parameters imputed from the survey responses in regression models as a control for differences in preferences across individuals. This paper focuses on imputations for respondents in the Panel Study of Income Dynamics (PSID).It also studies the covariation of risk preferences among members of households.It finds fairly strong covariation in attitudes about risk -- between parents and children and especially between siblings and between spouses.
ER  -