RT Journal Article
SR Electronic
T1 Risk Attitudes, Investment Behavior and Linguistic Variation
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 0119-9999R2
DO 10.3368/jhr.59.2.0119-9999R2
A1 Juliana Bernhofer
A1 Francesco Costantini
A1 Matija Kovacic
YR 2021
UL http://jhr.uwpress.org/content/early/2021/05/04/jhr.59.2.0119-9999R2.abstract
AB This paper explores the relationship between linguistic variation and individual attitudes toward risk and uncertainty. We propose an innovative marker that classifies languages according to the number of non-indicative moods in the grammatical contexts involving uncertainty. We find that speakers of languages that use these moods more intensively are on average more risk averse. Our marker is then used to instrument risk aversion in the model for financial asset accumulation. In addition,by using Chen (2013)’s FTR linguistic marker as a proxy for the subjective discount rate, we disentangle the effects of risk aversion and time preferences on asset accumulation.