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Working Paper
Comparative risk aversion of different preferences
EMLYON Business School - 2011 - 1 vol (14 p.)
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An article by Kihlstrom and Mirman about comparative risk aversion with many goods is critiqued. If "more risk averse" is interpreted as signifying that an individual is less willing to accept a median-preserving spread, then risk aversion cannot be compared across individuals with different preferences. If it is interpreted as signifying that an individual has a greater directional risk premium, then risk aversion may be compared across individuals with different preferences, in particular in
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partial equilibrium analysis.
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