Working Paper 706

Portfolio Choices and Risk Preferences in Village Economies

Robert Townsend | Economics Professor, University of Chicago
Sam Schulhofer-Wohl | Senior Vice President and Director of Research
Pierre-Andre Chiappori
Krislert Samphantharak

Published June 3, 2013

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.

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