Disposable income ↔ Economic risk tolerance
Holt–Laury measures the preference. Income changes the budget. Do not call either 'testosterone'.
Observational · Moderate · N=212
The association does not survive the backdoor. Usually SES, outdoor time, or healthy-user bias.
Mechanism
Holt and Laury showed that the incentive scale itself moves estimated risk aversion. Background wealth should do the same. A T–risk paper that skips wealth is leaking.
Caveats
Lab lists are not portfolio choice. Gender composition of the room changes means.
Effect
qualitative. Richer people can afford more risk; risk-tolerant people may sort into higher-variance pay. Both arrows are live.
Nodes
Named confounders
Cite this page
What Causes What. “Disposable income → Economic risk tolerance.” https://whatcauseswhat.org/edges/e-income-risk (atlas updated 2026-08-31).
Papers
- Risk aversion and incentive effects
C. A. Holt, S. K. Laury · 2002 · American Economic Review