Climate Change is Decreasing Risk Aversion Globally (with Meng Song)
We estimate the effects of climate change on individual risk preferences, using global cross-sectional preference data linked to personal climate histories. We find that a 1 degree C increase in mean lifetime temperature is associated with a 0.318-unit decrease in relative risk aversion globally. We replicate the results in panel datasets from four countries containing longitudinal measures of risk preferences. Historical projections indicate that climate change between 1981 and 2026 decreased median global risk aversion by 16%. Our results suggest that climate change may be shaping economic preferences in ways that could erode support for its own mitigation.
The Yeoman's Portfolio: Measuring Risk Preferences Historically using Crop Choice (with Daniela Vidart)
We design a new method for measuring the risk preferences of agents in the past using data on agricultural production decisions. Using our method, we estimate risk preferences in 93% of contiguous U.S. counties decennially from 1890 to 1920. Our results reveal substantial cross-sectional heterogeneity in preferences centered at risk neutrality, and temporal variation in response to aggregate shocks. We show that measured risk aversion is negatively correlated with financial risk-taking within and outside the agricultural context, is representative of the underlying household preference distribution, and that individuals in counties with higher exposure to the American frontier were more risk-taking.
`Nobody Wants to Work Anymore': Lifetime Labor Market Experiences and the Decline of Male LFP in the United States (with Daniela Vidart)
Male labor force participation has declined steadily for 50 years in the United States. We show that one cause has been changes in men's beliefs about the returns to work, shaped by lifetime experiences of the aggregate male labor market. We find that experience effects on participation persist for men who move across state lines, are stronger for same-race male experiences, and are driven by formative childhood years. We also document effects of experiences on direct measures of labor market expectations. Our findings suggest that experience effects can turn short-run declines in labor demand into long-run declines in labor supply.
Risk-Taking Adaptation to Macroeconomic Experiences (with Daniela Vidart)
Forthcoming, Journal of Political Economy Microeconomics
We study how lifetime experiences of macroeconomic volatility shape individual risk attitudes. We build a Bayesian model where risk aversion endogenously adapts to agents' beliefs about an exogenous income process. We combine panel data from Indonesia and Mexico containing elicited measures of risk aversion with state-level real GDP growth time series capturing individuals' lifetime macroeconomic experiences. Consistent with the model's predictions, we find that measured risk aversion increases with macroeconomic volatility, and this is a first-order driver of risk attitudes. These results are robust to many alternate specifications and controls and extend to risk-taking behavior in other domains.
James H. Fowler, Seth J. Hill, Remy Levin, Nick Obradovich. Stay-at-home orders associate with subsequent decreases in COVID-19 cases and fatalities in the United States. PLOS One, 2021
Richard Karlsson Linner, Pietro Biroli, Edward Kong,..., Remy Z. Levin,..., Daniel J. Benjamin, Philipp D Koellinger, Jonathan P. Beauchamp. Genome-wide association analyses of risk tolerance and risky behaviors in over 1 million individuals identify hundreds of loci and shared genetic influences. Nature Genetics, 2019.
Levin, Remy Z., and Chen, Paul. Rethinking the Constitution-Treaty Relationship. International Journal of Constitutional Law, 10(1), 242-260, 2012.
A Theory of Boundedly Rational Learning in Complex Environments
Risk, Insurance, and the Rise and Fall of American Whaling
Risk Preference Adaptation Theory
Pricing Risk in the Fog of War
Dimension, Hutchinson Operators, and Self-Similarity: Fundamental Concepts in Fractal Geometry (Senior Thesis, submitted as condition for graduation with distinction in Mathematics, WWU 2013)