Francesco Chelli

The paper deals with the estimation of the attitude to risk of a group of people, the Board of the Foundation for the Saving Bank of Florence. A specific method is used: the so-called trade-off method, both with the outward and the inward procedure. In a previous study Bacci and Chiandotto (2002) presented the data, holding that the risk attitude for the Board implies propensity to risk when low levels of income and utility are concerned, and risk aversion for higher values of income/utility. Different theoretical utility functions are estimated in this paper: very simple ones, like the power utility function, and more complex ones, including the specification used in Bacci and Chiandotto (2003). Our results imply either risk neutrality (aversion), when so-called outward trade-off procedure (inward trade-off procedure) data alone are used or, perhaps, risk aversion (propensity) when low (high) values for income/utility are considered.