Emotions and Risk Attitudes

Previous work has shown that preferences are not always stable across time, but surprisingly little is known about the reasons for this instability. I examine whether variation in people's emotions over time predicts changes risk attitudes. Using a large-panel dataset, identify happiness, anger, and fear as significant correlates of within-person Robustness checks indicate limited role alternative explanations. An event study around death parent or child further confirms large relationship between (JEL D12, D81, D91, I31)