Apparently less willing. (Perhaps they've never been to a casino.)
Do people behave the same in a laboratory experiment as they do in real life?“We found that the average investor’s risk aversion almost doubled, from about 2.85 to 5.2, when she experienced a 20 percent decline in home prices — the median decline in the sample — in her zip code,” Ravina says. In general the researchers’ findings about risk aversion were consistent with expectations: they found a lot of variety, but overall, younger investors (those under 42) were 17 percent less risk-averse than older investors; married investors were more risk averse than unmarried investors.
The researchers found that people are less willing to take risks when their wealth declines. They approximated investors’ wealth by looking at housing prices in the investor’s zip code between October 2007 and April 2008 — the period of large fluctuations in housing prices, including steep declines. That allowed the researchers to see how the Lending Club pool reacted to large changes in prices — how a big shock changes risk attitude.