Temporal Instability of Risk Preference among the Poor: Evidence from Payday Cycles
研究发现，依赖社会保障的贫困者在发薪日前风险容忍度升高，这种暂时性变化可能加剧贫困，心理健康恶化和相对剥夺感是潜在原因。
The poor live paycheck to paycheck and are repeatedly exposed to strong cyclical income fluctuations. We investigate whether such income fluctuations affect their risk preference. If risk preference temporarily changes around payday, optimal decisions made before payday may no longer be optimal afterward, which could reinforce poverty. By exploiting social security payday cycles in the United States, we find that the poor relying heavily on social security become more risk tolerant before payday. More than cognitive decline before payday, the deterioration of mental health and relative deprivation are likely to play a role. We find similar evidence among the Japanese elderly.