Relative Risk Aversion

Views Updated: Dec 15, 2025

Key Facts

Abbreviation
RRA
Pronunciation
/ˈrɛlətɪv rɪsk əˈvərʒən/
Category
Business
Related Field
General

Examples in Context

  1. Moreover, the equation still includes three parameters : output elasticity of labor, subjective utility discount factor and relative risk aversion.
  2. Based on consumption-based asset pricing theory, the equity premium in China's stock market should be explained by a high relative risk aversion coefficient of investor.
  3. We use after-tax income to capture human resources, and find that changes in after-tax income have no power in explaining variation of relative risk aversion.
  4. Thirdly, we assume utility is a function with the constant and relative risk aversion coefficients. Some results are derived about the value and timing of the option to invest.
  5. Nearly 30 % of the increase savings deposit could be explained by these factors corresponding to a reasonable value of relative risk aversion.

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