Publication details for Prof Jason Shachat

Heinrich, T. & Shachat, J. (2020). The development of risk aversion and prudence in Chinese children and adolescents. Journal of Risk and Uncertainty 61(3): 263-287.

• Publication type: Journal Article
• ISSN/ISBN: 0895-5646, 1573-0476
• DOI: 10.1007/s11166-020-09340-7
• Further publication details on publisher web site
• Durham Research Online (DRO) - may include full text

Author(s) from Durham

• Prof Jason Shachat

Abstract

This study experimentally evaluates the risk preferences of children and adolescents living in an urban Chinese environment. We use a simple binary choice task that tests risk aversion, as well as prudence. This is the first test for prudence in children and adolescents. Our results reveal that subjects from grades 5 to 11 (10 to 17 years) make mostly risk-averse and prudent choices. The choices of 3rd graders (8 to 9 years) do not differ statistically from risk neutral benchmarks, but at the same time they make mostly prudent choices. We also find evidence for a transmission of risk preferences. There is positive correlation between all children’s and their parents’ tendency to make risk-averse choices. There is also positive correlation between girls’ and their parents’ tendency to make prudent choices.