... This leads to the following simple prediction: Assume that the risks x and y are small in the... more ... This leads to the following simple prediction: Assume that the risks x and y are small in the sense of Samuelson (1970). ... Figure 1 plots the optimal investment levels as a function of w. To simplify, we assume decreasing absolute risk aversion (DARA). ...
This study presents literature reviews for the period 2000-2013 on (i) the health effects of pest... more This study presents literature reviews for the period 2000-2013 on (i) the health effects of pesticides and on (ii) preference valuation of health risks related to pesticides, as well as a discussion of the role of benefit-cost analysis applied to pesticide regulatory measures. This study indicates that the health literature has focused on individuals with direct exposure to pesticides, i.e. farmers, while the literature on preference valuation has focused on those with indirect exposure, i.e. consumers. The discussion highlights the need to clarify the rationale for regulating pesticides, the role of risk perceptions in benefit-cost analysis, and the importance of inter-disciplinary research in this area. This study relates findings of different disciplines (health, economics, public policy) regarding pesticides, and identifies gaps for future research.
We investigate the effects of health and life expectancy on aversion to financial risks. In the f... more We investigate the effects of health and life expectancy on aversion to financial risks. In the first part of the paper, we consider a standard life-cycle consumption model in which an individual chooses his optimal consumption path for an exogenously determined level of health and life expectancy. We examine preferences for a risk to lifetime income and show that the effects of health and longevity on risk tolerance are generally ambiguous. An exception occurs when optimal consumption is constant over the remaining lifetime, a benchmark case in which health and longevity do not affect risk tolerance. However, health and longevity have no effect on risk tolerance for most standard utility functions used in the economics literature, even if consumption is not constant. In the second half of the paper, we design and conduct a statedpreference survey to empirically test the effects of health and longevity on risk tolerance. Survey respondents were randomly selected adults from the United States (n = 2,795). The survey includes self-reported measures of health as well as dichotomous-choice questions concerning gambles on lifetime income that allow us to classify respondents into four groups that can be ordered by relative risk tolerance. We estimate regression models relating relative risk tolerance to self-reported health, actuarial estimates of life expectancy, and other respondent characteristics. Our empirical results suggest that financial risk tolerance is positively associated with both health and life expectancy.
... This leads to the following simple prediction: Assume that the risks x and y are small in the... more ... This leads to the following simple prediction: Assume that the risks x and y are small in the sense of Samuelson (1970). ... Figure 1 plots the optimal investment levels as a function of w. To simplify, we assume decreasing absolute risk aversion (DARA). ...
This study presents literature reviews for the period 2000-2013 on (i) the health effects of pest... more This study presents literature reviews for the period 2000-2013 on (i) the health effects of pesticides and on (ii) preference valuation of health risks related to pesticides, as well as a discussion of the role of benefit-cost analysis applied to pesticide regulatory measures. This study indicates that the health literature has focused on individuals with direct exposure to pesticides, i.e. farmers, while the literature on preference valuation has focused on those with indirect exposure, i.e. consumers. The discussion highlights the need to clarify the rationale for regulating pesticides, the role of risk perceptions in benefit-cost analysis, and the importance of inter-disciplinary research in this area. This study relates findings of different disciplines (health, economics, public policy) regarding pesticides, and identifies gaps for future research.
We investigate the effects of health and life expectancy on aversion to financial risks. In the f... more We investigate the effects of health and life expectancy on aversion to financial risks. In the first part of the paper, we consider a standard life-cycle consumption model in which an individual chooses his optimal consumption path for an exogenously determined level of health and life expectancy. We examine preferences for a risk to lifetime income and show that the effects of health and longevity on risk tolerance are generally ambiguous. An exception occurs when optimal consumption is constant over the remaining lifetime, a benchmark case in which health and longevity do not affect risk tolerance. However, health and longevity have no effect on risk tolerance for most standard utility functions used in the economics literature, even if consumption is not constant. In the second half of the paper, we design and conduct a statedpreference survey to empirically test the effects of health and longevity on risk tolerance. Survey respondents were randomly selected adults from the United States (n = 2,795). The survey includes self-reported measures of health as well as dichotomous-choice questions concerning gambles on lifetime income that allow us to classify respondents into four groups that can be ordered by relative risk tolerance. We estimate regression models relating relative risk tolerance to self-reported health, actuarial estimates of life expectancy, and other respondent characteristics. Our empirical results suggest that financial risk tolerance is positively associated with both health and life expectancy.
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Papers by Nicolas Treich