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Federal Reserve Bank of St. Louis
Review
Risk Aversion at the Country Level
Nestor Gandelman
Ruben Hernandez-Murillo
Abstract

This article estimates the coefficient of relative risk aversion for 75 countries using data on self-reports of personal well-being from the 2006 Gallup World Poll. The analysis suggests that the coefficient of relative risk aversion varies closely around 1, which corresponds to a logarithmic utility function. The authors conclude that their results support the use of the log utility function in numerical simulations of economic models.


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Nestor Gandelman & Ruben Hernandez-Murillo, "Risk Aversion at the Country Level" , Federal Reserve Bank of St. Louis, Review, volume 97, issue 1, pages 53-66, 2015.
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