An empirical study by Kathrin (1996) showed that human capital investment is an inverse function of the
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- An empirical study by Kathrin (1996) showed that human capital investment is an inverse function of the degree of relative aversion. In this case, the higher the risk aversion, the less would be the investment in education and vice versa. The study also showed that wage growth is positively related to a preference for risk-taking. In other words, individuals would be willing to take more risk if the wage growth is expected to grow positively.
- On the other hand, if the expected growth was low, a lesser risk would be undertaken. The researcher also concluded that more educated individuals are more likely to be risk-takers and that more education tends to lead people to invest in stocks and other risky financial assets. Would you classify yourself as a risk-taker, risk-averse, or neutral person? Might you be leaving some money on the table if you belong to risk-averse or neutral categories? What are the pros and cons of being a risk-taker
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
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