Risk Preference and Employment Contract Type

• DOI: 10.1111/j.1467-985x.2006.00424.x
• Publication Date: 2006-05-16T16:31:52Z
• Authors: Sarah Brown; Lisa Farrell; Mark N. Harris; John G. Sessions
• Keywords: Revealed preference; Consumption; Discrete choice; Risk Aversion; Value (mathematics)

Summary We explore the possibility that a systematic relationship exists between employment within particular type of contract and risk preference. exploit set proxies for preference, whereby some capture loving behaviour (expenditure on gambling, smoking alcohol) whereas others averse life contents insurance, unearned income). The empirical analysis, based pooled cross-section data from UK Family Expenditure Survey, 1997–2000, provides evidence with, example, self-employed workers being more or less likely to engage in consumption ‘risky’ financial security products respectively. results are ordered generalized extreme value model, relatively infrequently used discrete choice which allows ordering correlation alternatives observed.