New Risk Management Study Findings Recently Were Reported by Researchers at Catholic University of the Sacred Heart (Crowded Out: Heterogeneity In Risk Attitudes Among Poor Households In the Us): Risk Management

2021 NOV 08 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Investigators publish new report on Risk Management. According to news reporting from Milan, Italy, by NewsRx journalists, research stated, “Not much is known about the heterogeneity of risk attitudes among poor households in rich countries. This paper provides estimates from a unique data set collected among the urban poor in Atlanta, Georgia.”

Financial support for this research came from Universita Cattolica del Sacro Cuore within the CRUI-CARE Agreement.

The news correspondents obtained a quote from the research from the Catholic University of the Sacred Heart, “The data set includes lab-in-the-field experiments on the relationship between risk attitudes and several household characteristics. Apart from looking at income, wealth, and education, we are particularly interested in household composition as it captures the number and kind of people who are dependant on the income of the household head. Heads of households who are less risk averse may be willing to take on the extra risk from smaller resource margins resulting from additional dependants, implying a negative relationship between household size and risk aversion. However, if the size of the household is a result of exogenous forces some heads of households may become more risk averse with more dependants. Household size can also reflect a risk management choice that involves adding non-dependant members who can provide resources and risk sharing. However, this possibility is limited to homes that are not already too crowded. We find that household size correlates positively with the risk aversion of the head, but with a large proportion of children the correlation is strongly dampened. However, this negative effect of children is conditional on the home not already being crowded.”

According to the news reporters, the research concluded: “These heterogeneous findings have implications for the design of new insurance, savings, and credit programs where risk attitudes are important to the decisions to adopt.”

This research has been peer-reviewed.

For more information on this research see: Crowded Out: Heterogeneity In Risk Attitudes Among Poor Households In the Us. Journal of Risk and Uncertainty, 2021. Journal of Risk and Uncertainty can be contacted at: Springer, Van Godewijckstraat 30, 3311 Gz Dordrecht, Netherlands. (Springer - www.springer.com; Journal of Risk and Uncertainty - http://www.springerlink.com/content/0895-5646/)

Our news journalists report that additional information may be obtained by contacting Arianna Galliera, Catholic University of the Sacred Heart, Dept. of Economics and Finance, Via Necchi 5, I-20123 Milan, Italy.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1007/s11166-021-09363-8. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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