Are Tall People Less Risk Averse than Others?

28 Pages Posted: 14 Apr 2012

See all articles by Olaf Hübler

Olaf Hübler

University of Hannover; IZA Institute of Labor Economics

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Abstract

This paper examines the question of whether risk aversion of prime-age workers is negatively correlated with human height to a statistically significant degree. A variety of estimation methods, tests and specifications yield robust results that permit one to answer this question in the affirmative. Hausman-Taylor panel estimates, however, reveal that height effects disappear if personality traits and skills, parents' behaviour, and interactions between environment and individual abilities appear simultaneously. Height is a good proxy for these influences if they are not observable. Not only one factor but a combination of several traits and interaction effects can describe the time-invariant individual effect in a panel model of risk attitude.

Keywords: height, risk preference

JEL Classification: D90, J13, J24

Suggested Citation

Hübler, Olaf, Are Tall People Less Risk Averse than Others?. IZA Discussion Paper No. 6441. Available at SSRN: https://ssrn.com/abstract=2039567

Olaf Hübler (Contact Author)

University of Hannover ( email )

Institute of Quantitative Economic Research
D-30167 Hannover
Germany
+49 511 762 4794 (Phone)
+49 511 762 3923 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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