Political Preference and Risk Attitudes in the UK

초록

Do risk averse individuals indeed prefer left‐wing parties? Risk averse individuals are believed to value more on social protections and redistribution policies which are often the main policy direction of left parties, towards possible risks they may face in the future. In this short paper, we present empirical results which suggest that risk averse individuals are more likely to vote for left‐wing political parties such as Labour party in the UK, using data from the British Household Panel Survey (BHPS) from 1993 to 2008, where risk aversion could be identified and individual political preferences are annually collected. We distinguish this result from the previously reported finding that risk averse voters might prefer to reelect incumbent governments, as opposed to alternative parties. To our knowledge, this relationship has not been previously tested empirically and while our study focuses specifically on the UK political environment during a relatively short time period, it suggests that models that attempt to capture electoral decision‐making could benefit from incorporating this effect.

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