Risk Aversion, Patience and Intelligence: Evidence Based on Macro Data

17 Pages Posted: 18 Mar 2019

See all articles by Niklas Potrafke

Niklas Potrafke

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: 2019

Abstract

Using the new macro data on risk aversion and patience by Falk et al. (2018), I show that risk aversion and patience are related to intelligence: high-IQ populations are more patient and more risk averse than low-IQ populations. The correlation between patience and intelligence corroborates previous results based on micro data. Intelligent people tend to be patient because they have long time horizons. The correlation between risk aversion and intelligence supports new micro data studies based on dynamically optimized sequential experimentation (Chapman et al. 2018).

Keywords: risk aversion, patience, intelligence

JEL Classification: D000, D810, D900

Suggested Citation

Potrafke, Niklas, Risk Aversion, Patience and Intelligence: Evidence Based on Macro Data (2019). CESifo Working Paper No. 7546, Available at SSRN: https://ssrn.com/abstract=3352909

Niklas Potrafke (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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