An econometric procedure for estimating Arrow‐Pratt coefficients of risk aversion is derived. The model of farmers allocating land among different crops, and time between leisure and labor, allows for testing Arrow's hypotheses of decreasing absolute risk aversion and increasing relative risk aversion. The empirical results support these hypotheses.
No takes yet. Share an insight, caveat, or question.
Bar‐Shira et al. (1997) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: