Thursday, September 18, 2008

Risk aversion and age

It seems like as I get older I'm also getting more risk averse. I'm wondering if this is true in general. I don't find results using asset pricing models very useful because it seems that these results might be contaminated by asset allocation rules over the lifetime. If it is true in general then why might it be true? Is there some genetic or evolutionary basis for this? At the same time I can think of a counter-example right away: Steve Fossett.

It's not so bad that I'm even afraid to drive but it's getting close. Or maybe it's because I've just read this article on what it's like to hit a pedestrian with a car.

Drivers weren’t charged in most of the 16 pedestrian fatalities in DC last year. Pedestrian error accounted for 10 of the 15 fatalities in Montgomery County in 2004 and 11 of the 13 fatalities in 2003. All 15 pedestrian deaths in Prince George’s County in 2004 were the fault of the pedestrian.

A collision with a pedestrian or bicyclist can be especially graphic. There’s often very little separating a driver from the person who’s been hit.

“It’s more personal,” says detective Bruce Werts, a member of Montgomery County’s collision-reconstruction unit. “There are times you might be a foot from each other, looking at each other.”

Drivers who are at fault in a collision are left with the guilt of knowing they caused an injury or death. They face traffic violations and possible criminal charges.

Innocent drivers such as El Sawi may be haunted by lingering questions: Why was that person there at that moment? What if I hadn’t stopped to run that errand?

“It doesn’t matter how many times we tell them they did nothing wrong,” says detective Nate Ratnofsky, a former member of the Montgomery County unit. “They still have to live the rest of their lives knowing they killed somebody.”

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