Published November 14, 2022
| public
Journal Article
Time-Varying Risk Aversion? Evidence from Near-Miss Accidents
- Creators
- Shum, Matthew
- Xin, Yi
Abstract
We present evidence consistent with time-varying risk preferences among automobile drivers. Exploiting a unique data set of agents' high-frequency driving behavior collected by a mobile phone application, we show that drivers drive more conservatively following near-miss accidents. In a preferred specification, a near-miss triggers a reduction in driving distance of 12.98 kilometers, in-car cell phone use by more than 100%, and highway use by 43.24%. Structural estimation results indicate that such changes in behavior are consistent with an increase in risk aversion of 10.54% to 43.77% and a reduction in annual insurance cost amounting to 2.04% to 3.31% of the average car insurance premium.
Additional details
- Eprint ID
- 118161
- Resolver ID
- CaltechAUTHORS:20221130-645685700.2
- Created
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2022-12-23Created from EPrint's datestamp field
- Updated
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2022-12-23Created from EPrint's last_modified field