Is risk-aversion hereditary? [An article from: Journal of Mathematical Economics]

This digital document is a journal article from Journal of Mathematical Economics, published by Elsevier in 2005. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
The degree of risk-aversion determines portfolio holdings and subsequently the distribution of wealth. Do we inherit our preferences, or are they determined randomly or through experience? Can preferences be ''learned''? The empirically observed Pareto wealth distribution at the high-wealth range may provide an answer to these questions. We show that the Pareto wealth distribution implies an upper bound on the role of heredity in determining risk-aversion.