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Table 3 Predictive validity of the risk variables: Controlling for cognitive ability, males only

From: The psychometric and empirical properties of measures of risk preferences

  Portfolio Risk Equity Share Own Business Alcohol Smoking
  \({\hat {\delta }}_{p}\) R 2 ΔR 2 \({\hat {\delta }}_{p}\) R 2 ΔR 2 \({\hat {\delta }}_{p}\) R 2 ΔR 2 \({\hat {\delta }}_{p}\) R 2 ΔR 2 \({\hat {\delta }}_{p}\) R 2 ΔR 2
Risk General
σ m2= 0 0.424*** 0.024 0.003 0.010*** 0.024 0.005 0.079*** 0.018*** 0.018**
  (0.142)    (0.004)    (0.009)    (0.006)    (0.009)   
σ m2 > 0 0.453*** 0.026 0.004 0.010*** 0.026 0.007 0.103*** 0.022*** 0.023*
  (0.182)    (0.005)    (0.011)    (0.008)    (0.012)   
Risk Financial
σ m2= 0 0.987*** 0.040 0.020 0.020*** 0.041 0.023 0.072*** 0.018*** 0.004
  (0.132)    (0.004)    (0.009)    (0.006)    (0.009)   
σ m2 > 0 1.242*** 0.052 0.031 0.027*** 0.061 0.043 0.093*** 0.025*** 0.007
  (0.177)    (0.005)    (0.011 )    (0.008)    (0.012)   
Risk HRS
σ m2= 0 0.697*** 0.029 0.009 0.010** 0.024 0.004 0.091*** 0.007 −0.009
  (0.152)    (0.005)    (0.009)    (0.006)    (0.010)   
σ m2 > 0 1.070*** 0.042 0.021 0.016** 0.034 0.013 0.145*** 0.013 −0.009
  (0.242)    (0.008)    (0.015)    (0.010)    (0.016)   
  1. NOTES: This table reports the KSS estimates of the effects of risk attitudes on the five outcome variables given in the column headings and the KSS R 2 for the model with measurement-error adjustment (σ m2 > 0), as well as the OLS estimates and R 2 for the model without adjustment (σ m2 = 0). 30 regressions were run to generate these results (three risk variables × five outcomes × two). Results are for males only. ΔR 2 is the incremental R 2 from including the risk variable in the regression. R 2 and ΔR 2 are not shown for Own Business, Alcohol, and Smoking, because these are binary dependent variables. All specifications include a constant and controls for birth year, birth weight, log income, marital status, years of education, and cognitive ability
  2. * Significant at 10% level; ** significant at 5% level; *** significant at 1% level