A Structural Model of Loss Aversion in the Housing Market

2014 ◽  
Keyword(s):  
Housing Market ◽  
Loss Aversion ◽  
Structural Model

Loss Aversion in the Housing Market: A New Paradigm

2017 ◽  
Author(s):  
Zhaohui Li ◽  
Michael Joseph Seiler ◽  
Hua Sun
Keyword(s):  
Housing Market ◽  
Loss Aversion ◽  
New Paradigm

scholarly journals The Nature of Risk Preferences: Evidence from Insurance Choices

2013 ◽  
Vol 103 (6) ◽  
pp. 2499-2529 ◽  
Author(s):  
Levon Barseghyan ◽  
Francesca Molinari ◽  
Ted O'Donoghue ◽  
Joshua C Teitelbaum
Keyword(s):  
Loss Aversion ◽  
Structural Model ◽  
Marginal Utility ◽  
Unobserved Heterogeneity ◽  
Risky Choice ◽  
Probability Weighting ◽  
Disappointment Aversion ◽  
Diminishing Marginal Utility ◽  
Standard Risk ◽  
Small Probabilities

We use data on insurance deductible choices to estimate a structural model of risky choice that incorporates “standard” risk aversion (diminishing marginal utility for wealth) and probability distortions. We find that probability distortions—characterized by substantial overweighting of small probabilities and only mild insensitivity to probability changes—play an important role in explaining the aversion to risk manifested in deductible choices. This finding is robust to allowing for observed and unobserved heterogeneity in preferences. We demonstrate that neither Kőszegi-Rabin loss aversion alone nor Gul disappointment aversion alone can explain our estimated probability distortions, signifying a key role for probability weighting. (JEL D14, D81, G22)

scholarly journals Loss Aversion and its Reference Point in the Housing Market

2011 ◽  
Vol 69 (null) ◽  
pp. 141-155 ◽  
Author(s):  
김준형 ◽  
Lewis Alexander
Keyword(s):  
Housing Market ◽  
Loss Aversion ◽  
Reference Point
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