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Quantifying Loss Aversion: Evidence from a UK Population Survey

Blake, D. ORCID: 0000-0002-2453-2090, Cannon, E. and Wright, I. D. (2021). Quantifying Loss Aversion: Evidence from a UK Population Survey. Journal of Risk and Uncertainty,


We quantify differences in attitudes to loss from individuals with different demographic, personal and socio-economic characteristics. Our data are based on responses from an online survey of a representative sample of over 4,000 UK residents and allow us to produce the most comprehensive analysis of the heterogeneity of loss aversion measures to date. Using the canonical model proposed by Tversky and Kahneman (1992), we show that responses for the population as a whole differ substantially from those typically provided by students (who form the basis of many existing studies of loss aversion). The average aversion to a loss of £500 relative to a gain of the same amount is 2.41, but loss aversion correlates significantly with characteristics such as gender, age, education, financial knowledge, social class, employment status, management responsibility, income, savings and home ownership. Other related factors include marital status, number of children, ease of savings, rainy day fund, personality type, emotional state, newspaper and political party. However, once we condition on all the profiling characteristics of the respondents, some factors, in particular gender, cease to be significant, suggesting that gender differences in risk and loss attitudes might be due to other factors, such as income differences.

Publication Type: Article
Additional Information: This is a post-peer-review, pre-copyedit version of an article published in Journal of Risk and Uncertainty. The final authenticated version is available online at:
Publisher Keywords: Loss aversion, expected utility, risk attitudes, gender effects, survey data
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
H Social Sciences > HF Commerce
H Social Sciences > HN Social history and conditions. Social problems. Social reform
Departments: Business School > Actuarial Science & Insurance
Business School > Finance
Date available in CRO: 07 Jul 2021 09:46
Date deposited: 7 July 2021
Date of acceptance: 1 July 2021
[img] Text - Accepted Version
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