Development of an Individual Measure of Loss Aversion

John Payne, Duke University, USA
Suzanne Shu, University of California Los Angeles, USA
Elizabeth Webb, Columbia University, USA
Namika Sagara, Duke University, USA
An easy to use, model free, measure of loss aversion based on responses to pairs of mixed (gain and loss) three-outcome gambles is presented along with data from more 7000 respondents showing that the measure predicts consumer financial preferences for retirement savings investments, Social Security claiming, and life annuity preferences.
[ to cite ]:
John Payne, Suzanne Shu, Elizabeth Webb, and Namika Sagara (2015) ,"Development of an Individual Measure of Loss Aversion", in NA - Advances in Consumer Research Volume 43, eds. Kristin Diehl and Carolyn Yoon, Duluth, MN : Association for Consumer Research, Pages: 260-264.