Loss Aversion and Autism

If you have $50, would you rather lose $30 or keep $20.  After a little bit of thought, you probably realize that these are the same thing.  Experimental economists, however, have generally found that individuals will go to great lengths to avoid the $30 loss.   This phenomenon is named  loss aversion.   In prospect theory, loss…

Risk aversion and health behaviors

Are risk averse individuals less likely to engage in unhealthy behaviors?  According to Anderson and Mellor (JHE 2008), the answer is yes.  Using a Holt and Laury (AER 2002) methodology to measure risk aversion, the authors find that individuals who are risk averse are less likely to smoke, drink, be overweight or drive over the…