Virtual Seminar: Professor Gijs van de Kuilen - University of Tilburg (Netherlands)

This study reports the results of the first artefactual field experiment designed to measure the prevalence of aversion toward social risks for health and wealth in a large and demographically representative sample. We identify social risk preferences for wealth and health for losses and gains and decompose these attitudes into four different components: viz., an individual risk component, a collective risk component, an ex-post inequality component and an ex-ante inequality component. We observe that risk aversion and inequality aversion is the modal preference for health and wealth in the domain of gains and losses, but it is less pronounced in the loss domain. A parametric decomposition of social risk preferences reveals that this is mainly due to the fact that respondents are risk neutral for individual members of society in the loss domain for health and wealth. These results highlight the importance of considering different components of social risk preferences when managing social risk.