Expectations and Risk Attitudes: Evidence from a Longitudinal Survey in Tshwane, South Africa

Abstract

We investigate the relationship between risk taking propensity and economic and health expectations using data from a longitudinal survey conducted in the Tshwane Municipality, South Africa. We find that better economic expectations and better health expectations significantly predict higher risk taking propensity. We find that the results regarding economic expectations generalize under a variety of robustness checks, but the results regarding health expectations do not. Our findings highlight a channel through which economic expectations can affect decision making under risk.