Measuring and debiasing consumer pension risk attitudes

This panel paper by Bas Donkers (EUR), Carlos Lourenço (RSM) and Benedict Dellaert (EUR) addresses the issue of how best to measure and debias consumer risk attitudes in the domain of pension product decisions. The paper first reviews the academic literature on the measurement of attitudes towards risk. Next it discusses potential biases in these approaches. The review on whether or not customers will accept product advice that is based on unbiased measures of consumer risk attitudes, may assist firms in understanding why customers may or may not appreciate financial recommendations based on debiased risk profiles. The paper then contrasts the academic state-of-the-art on measuring consumer risk attitudes with current practice in the financial advice industry.