Abstract
This study analyzes the external validity of experimentally elicited ambiguity aversion, likelihood insensitivity and risk aversion on real-life decision-making in the field of student loans. Our main finding is that ambiguity aversion, likelihood insensitivity and risk aversion are not related to the decision to take out a student loan nor to the amount students decide to borrow, conditional on having a loan. We discuss our results in the context of recent advances to relate lab measures of ambiguity aversion and likelihood insensitivity to real economic decisions.
| Original language | English |
|---|---|
| Pages (from-to) | 85-98 |
| Journal | Journal of Behavioral and Experimental Economics |
| Volume | 67 |
| DOIs | |
| Publication status | Published - Apr 2017 |
Keywords
- Ambiguity aversion
- Likelihood insensitivity
- Risk aversion
- Borrowing behavior
- Student loans