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Author: Cho, Insoo
Resulting in 2 citations.
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Cho, Insoo Orazem, Peter |
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How Endogenous Risk Preferences and Sample Selection Affect Analysis of Firm Survival Small Business Economics published online (4 January 2020): DOI: 10.1007/s11187-019-00288-w. Also: https://link.springer.com/article/10.1007/s11187-019-00288-w Cohort(s): NLSY79 Publisher: Springer Keyword(s): Endogeneity; Entrepreneurship; Exits; Panel Study of Income Dynamics (PSID); Risk-Taking; Sample Selection Permission to reprint the abstract has not been received from the publisher. The roles of selection and endogeneity in measured risk preferences are illustrated using the correlation between risk attitudes and firm survival. Selection bias occurs when risk attitudes are elicited only from current entrepreneurs so that the risk attitudes of unsuccessful entrepreneurs are excluded from the analysis. Risk attitudes measured after agents enter entrepreneurship will endogenously reflect business success. Data on entrepreneurs from the National Longitudinal Survey of Youth 1979 and the Panel Study of Income Dynamics shows that when risk attitudes are measured subject to selection and endogeneity, mixed or even positive correlations between risk acceptance and the probability of firm exit occur. However, firm exits fall monotonically with willingness to accept risk when risk preference measures are not subject to selection or endogeneity related to business success. |
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Bibliography Citation
Cho, Insoo and Peter Orazem. "How Endogenous Risk Preferences and Sample Selection Affect Analysis of Firm Survival." Small Business Economics published online (4 January 2020): DOI: 10.1007/s11187-019-00288-w.
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Cho, Insoo Orazem, Peter Rosenblat, Tanya |
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Are Risk Attitudes Fixed Factors or Fleeting Feelings? Journal of Labor Research 39,2 (June 2018): 127-149. Also: https://link.springer.com/article/10.1007/s12122-018-9262-2 Cohort(s): NLSY79 Publisher: Springer Keyword(s): Attitudes; Labor Force Participation; Risk-Taking Permission to reprint the abstract has not been received from the publisher. We investigate the stability of measured risk attitudes over time, using a 13-year longitudinal sample of individuals in the National Longitudinal Survey of Youth 1979. We find that an individual's risk aversion changes systematically in response to personal economic circumstances. Risk aversion increases with lengthening spells of employment and time out of labor force, and decreases with lengthening unemployment spells. However, the most important result is that the majority of the variation in risk aversion is due to changes in measured individual tastes over time and not to variation across individuals. These findings that measured risk preferences are endogenous and subject to substantial measurement errors suggest caution in interpreting coefficients in models relying on contemporaneous, one-time measures of risk preferences. |
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Bibliography Citation
Cho, Insoo, Peter Orazem and Tanya Rosenblat. "Are Risk Attitudes Fixed Factors or Fleeting Feelings?" Journal of Labor Research 39,2 (June 2018): 127-149.
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