Code for: Temporal Instability of Risk Preference Among the Poor: Evidence from Payday Cycles
Principal Investigator(s): View help for Principal Investigator(s) Mika Akesaka, Kobe University; Peter Eibich, Max Planck Institute for Demographic Research; Chie Hanaoka, Toyo University; Hitoshi Shigeoka, Simon Fraser University
Version: View help for Version V1
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| dofile | 10/27/2022 10:31:PM | ||
| graph | 08/18/2022 06:38:AM | ||
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Project Description
Summary:
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The poor live paycheck to paycheck and are repeatedly
exposed to strong cyclical income fluctuations. We investigate whether such
income fluctuations affect their risk preference. If risk preference
temporarily changes around payday, optimal decisions made before payday may no
longer be optimal afterward, which could reinforce poverty. By exploiting Social
Security payday cycles in the US, we find that the poor relying heavily on
Social Security become more risk tolerant before payday. More than cognitive
decline before payday, the deterioration of mental health and relative
deprivation are likely to play a role. We find similar evidence among the
Japanese elderly.
Scope of Project
Subject Terms:
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poverty;
risk preference;
Social Security;
mental health ;
relative deprivation ;
social comparison;
elderly ;
Health and Retirement Survey;
Japanese Study of Aging and Retirement
JEL Classification:
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D81 Criteria for Decision-Making under Risk and Uncertainty
D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
I32 Measurement and Analysis of Poverty
D81 Criteria for Decision-Making under Risk and Uncertainty
D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
I32 Measurement and Analysis of Poverty
Geographic Coverage:
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United States, Japan
Data Type(s):
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survey data
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