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Portfolio Choices and Risk Preferences in Village Economies

Working Paper 706 | Published June 3, 2013

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Authors

Robert Townsend Economics Professor, University of Chicago

Pierre-Andre Chiappori

Krislert Samphantharak

Portfolio Choices and Risk Preferences in Village Economies

Abstract

We use a model of optimal portfolio choice to measure heterogeneity in risk aversion among households in Thai villages. There is substantial heterogeneity in risk preferences, positively correlated in most villages with alternative estimates based on a full risk-sharing model.