Willman, Alpo (contributor) - 2007
risk aversion
(CARA). From the empirical point of view, both of these functions are generally regarded
unrealistic … constant relative risk aversion. Now equation (10) implies the
following solution for the risk-adjusted human wealth:
8 … risk adjustment to human wealth depends positively on the size
of risk aversion θ and income uncertainty
ε
σ . This is …