Abstract
BackgroundEmerging data from younger and middle-aged persons suggest that cognitive ability is negatively associated with risk aversion, but this association has not been studied among older persons who are at high risk of experiencing loss of cognitive function.MethodsUsing data from 369 community-dwelling older persons without dementia from the Rush Memory and Aging Project, an ongoing longitudinal epidemiologic study of aging, we examined the correlates of risk aversion and tested the hypothesis that cognition is negatively associated with risk aversion. Global cognition and five specific cognitive abilities were measured via detailed cognitive testing, and risk aversion was measured using standard behavioral economics questions in which participants were asked to choose between a certain monetary payment ($15) versus a gamble in which they could gain more than $15 or gain nothing; potential gamble gains ranged from $21.79 to $151.19 with the gain amounts varied randomly over questions. We first examined the bivariate associations of age, education, sex, income and cognition with risk aversion. Next, we examined the associations between cognition and risk aversion via mixed models adjusted for age, sex, education, and income. Finally, we conducted sensitivity analyses to ensure that our results were not driven by persons with preclinical cognitive impairment.ResultsIn bivariate analyses, sex, education, income and global cognition were associated with risk aversion. However, in a mixed effect model, only sex (estimate = -1.49, standard error (SE) = 0.39, p < 0.001) and global cognitive function (estimate = -1.05, standard error (SE) = 0.34, p < 0.003) were significantly inversely associated with risk aversion. Thus, a lower level of global cognitive function and female sex were associated with greater risk aversion. Moreover, performance on four out of the five cognitive domains was negatively related to risk aversion (i.e., semantic memory, episodic memory, working memory, and perceptual speed); performance on visuospatial abilities was not.ConclusionA lower level of cognitive ability and female sex are associated with greater risk aversion in advanced age.
Highlights
Emerging data from younger and middle-aged persons suggest that cognitive ability is negatively associated with risk aversion, but this association has not been studied among older persons who are at high risk of experiencing loss of cognitive function
We examined the correlates of risk aversion among older persons and tested the hypothesis that cognitive ability is negatively related to risk aversion even after adjusting for relevant demographic and contextual factors; this pattern has been observed in relatively younger populations [6,7]
These findings are the first that we are aware of addressing the relation of cognitive ability with risk aversion among older persons with a wide spectrum of cognitive abilities and provide new data regarding the relative influence of cognitive ability versus related demographic and contextual factors on risk preferences
Summary
Emerging data from younger and middle-aged persons suggest that cognitive ability is negatively associated with risk aversion, but this association has not been studied among older persons who are at high risk of experiencing loss of cognitive function. Compelling economics, behavioral economics, and neuroeconomics studies have shown that risk preferences are predictive of several real world outcomes, including economic outcomes, financial and healthcare decisions, and even health behaviors [1,2,3,4]. We are not aware of studies that have attempted to measure the extent to which cognitive ability is related to risk aversion among community-based older persons after adjusting for relevant demographic and contextual factors. Older persons suffer a disproportionate burden of illness and are faced with some of the most challenging healthcare decisions (e.g., whether to undergo invasive treatments for conditions unlikely to be cured, end of life care), and their choices are associated with major personal, familial, and societal costs. Given the dramatic relative increase in the population of older adults and the implications of the financial and other decisions older people make, it is important that we understand older persons’ risk preferences
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