Risk Aversion and the Elasticity of Marginal Utility with Respect to Consumption

Consumer Interests Annual, v. 49, 2003

13 Pages Posted: 24 Jun 2015

See all articles by Sherman D. Hanna

Sherman D. Hanna

Ohio State University (OSU)

Michael Gutter

University of Florida - Department of Family, Youth, and Community Sciences

Patti Fisher

Virginia Polytechnic Institute & State University - Consumer Studies

Date Written: March 23, 2003

Abstract

Hypothetical questions were used with 252 students at two universities to elicit values of relative risk aversion and of the elasticity of marginal utility with respect to consumption. Conceptually, the magnitude of these two utility function parameters are plausibly similar, but there was not a significant correlation in the expected direction. Females had significantly higher risk aversion than males, but there was no difference in the elasticity. Implications for financial decisions are discussed.

Keywords: risk aversion, risk tolerance, intertemporal elasticity, saving, financial planning, life cycle savings, expected utility

JEL Classification: D14, D81, D91, E21

Suggested Citation

Hanna, Sherman D. and Gutter, Michael and Fisher, Patti, Risk Aversion and the Elasticity of Marginal Utility with Respect to Consumption (March 23, 2003). Consumer Interests Annual, v. 49, 2003. Available at SSRN: https://ssrn.com/abstract=2621994

Sherman D. Hanna (Contact Author)

Ohio State University (OSU) ( email )

1787 Neil Avenue
Campbell 265D
Columbus, OH 43210
United States
614-292-4584 (Phone)

Michael Gutter

University of Florida - Department of Family, Youth, and Community Sciences ( email )

United States

Patti Fisher

Virginia Polytechnic Institute & State University - Consumer Studies ( email )

Blacksburg, VA 24061
United States

HOME PAGE: http://https://sites.google.com/a/vt.edu/pattifisher/

Register to save articles to
your library

Register

Paper statistics

Downloads
65
rank
334,956
Abstract Views
360
PlumX Metrics