calc_rp: Helper function that calculates risk preferences from...

In dylan-turner25/RPadjust: What the Package Does (One Line, Title Case)

Description

Helper function that calculates risk preferences from individuals observed lottery choice.

Usage

calc_rp(
  utility_function,
  lottery_choice,
  lottery_probs_1,
  lottery_probs_2,
  lottery_payoffs_1,
  lottery_payoffs_2,
  rp_ub,
  rp_lb,
  rp_resolution,
  initial_wealth
)

Arguments

utility_function	a character vector representing the utility function to use for deriving the risk preferences. The only current option is "crra".
lottery_choice	a numeric value representing the observed lottery choice of the survey respondent
lottery_probs_1	a numerical vector representing the probabilities of the first outcome occurring in each lottery
lottery_probs_2	a numerical vector representing the probabilities of the second outcome occurring in each lottery
lottery_payoffs_1	a numerical vector representing the payoffs if the first outcome occurs in each lottery
lottery_payoffs_2	a numerical vector representing the payoffs if the second outcome occurs in each lottery
rp_ub	a numerical value representing the lower bound to consider for the risk preference coefficient.
rp_lb	a numerical value representing the upper bound to consider for the risk preference coefficient.
rp_resolution	a numeric value representing the resolution to use for identifying risk preferences. For example, a value of .01, will search the risk preference parameter space in 0.01 increments. This value can be adjusted to speed up computation if fine resolution is not required.#'
initial_wealth	a numerical value representing the initial wealth to use for each respondent

Value

returns adjusted risk preferences

Examples

calc_rp(utility_function = "crra",
       lottery_choice = 1,
       lottery_probs_1 = c(1,.5,.225,.125,.025),
       lottery_probs_2 = c(0,.5,.775,.875,.975),
       lottery_payoffs_1 = c(5,8,22,60,300),
       lottery_payoffs_2 = c(0,3,2,0,0),
       rp_ub = 2,
       rp_lb = -2,
       initial_wealth = .00000000000000001,
       rp_resolution = .05)
      

dylan-turner25/RPadjust documentation built on Dec. 20, 2021, 2:17 a.m.