Risk Attitudes, Investment Behavior and Linguistic Variation
48 Pages
Posted: 27 Dec 2015
Last revised: 4 Dec 2016
Ca Foscari University of Venice - Dipartimento di Economia; University of Padova
Ca Foscari University of Venice - Department of Economics
Università degli Studi di Udine
There are 2 versions of this paper
Date Written: December 3, 2016
Abstract
This paper explores the relationship between linguistic variation and individual attitudes toward risk and uncertainty. We propose an innovative linguistic marker that classifies languages according to the number of non-indicative moods in the grammatical contexts involving uncertainty. We find that more intensive users of these moods are on average more risk averse. Our marker is then used to instrument individual attitudes toward risk in the model for financial assets accumulation. In addition, by using the Chen(2013) marker as a proxy for subjective discount rate, we disentangle the effects of risk aversion and time preferences on assets accumulation.
Keywords: Language, Risk Aversion, Financial Assets Accumulation, Instrumental Variables
JEL Classification: D14, D81, D91, C36
Suggested Citation:
Suggested Citation
Kovacic, Matija and Bernhofer, Juliana and Costantini, Francesco, Risk Attitudes, Investment Behavior and Linguistic Variation (December 3, 2016). University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 34/15. Available at SSRN: https://ssrn.com/abstract=2708465 or http://dx.doi.org/10.2139/ssrn.2708465
