Beschreibung:
The formation and evolution of risk preference is one of the major topics in the study of economics. How risk preference responds endogenously to the macroeconomic environment is especially policy-relevant since the effects of macroeconomic policies also hinge on the endogenous risk preference. A traditional difficulty encountered by the existing research on this topic is to separate risk preference from expectation towards future economic conditions. The generalizability of the results are also limited because they focus mainly on the Western countries. Using a novel data set, the Global Preference Survey, we get rid of the confounding effects of expectations and confirm that experiencing economic depressions makes people more risk averse on average. Further, with the aid of a machine learning method, we show that the impact of macroeconomic experience on risk preference tends to differ by civilization. In particular, the direction of the impact for East Asian countries is completely reversed from that for Western Countries. The findings may help to explain the cross-country/civilization difference in the recovery speed from economic crises