H] indicates higher absolute risk aversion than [[theta].
What does ARA stand for?
ARA stands for Absolute Risk Aversion
This definition appears very frequently and is found in the following Acronym Finder categories:
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- Business, finance, etc.
See other definitions of ARA
We have 389 other meanings of ARA in our Acronym Attic
- Alternative Remittance and Underground Banking Systems (various locations)
- Activating Region 1
- American Roadster 1 (Aston Martin automobile model)
- Activating Region 2
- Argonne Advanced Research Reactor
- Automatic Ripcord Release
- Army Requirements and Resourcing Board
- Activating Region 3
- Agricultural Research for Development
- Assessment Report 5 (Intergovernmental Panel on Climate Change)
- Abwasser Reinigungs Anlage (German: Sewage Purification Plant; Switzerland)
- Academic Research Alliance
- Academy of Rehabilitative Audiology
- Accelerated Readiness Analysis
- Accredited Rural Appraiser (American Society of Farm Managers & Rural Appraisers, ASFMRA)
- Accumulate-Repeat-Accumulate (coding scheme)
- Acetylene Reduction Assay (microbiology)
- Acquisition Resources and Analysis (Directorate in the Office of the Secretary of Defense)
- Action Réhabilitation Assistance (French: Action Rehabilitation Assistance)
- Action Research Arm
Samples in periodicals archive:
HARA CASE: OPTIMAL SOLUTIONS AND ECONOMIC ANALYSIS In this section, we consider one kind of special case called Hyperbolic Absolute Risk Aversion (HARA) case.
This simple dynamic asset threshold effectively links Periods 1 and 2 in such a way that for some parameter values there is a stark divergence between standard static risk preferences, as reflected in the (unobservable) Arrow-Pratt coefficient of absolute risk aversion (-u"/u'), and what might be termed a "dynamic risk response" as reflected in observed risk-taking behavior given agent knowledge of the prevailing asset dynamics of the system.
Mehra and Prescott (1985) consider an environment with complete markets and preferences that display a linear coefficient of absolute risk tolerance (ART) or hyperbolic absolute risk aversion (HARA).
The optimal income replacement rate for nonworkers therefore rises with earnings uncertainty if taxpayers' absolute risk aversion declines sufficiently slowly (or rises) with consumption.
24) For the slope (23) to lie between -1 and 0, this difference must be negative; that is, the denominator must be larger than the numerator in absolute terms, which using the FOC (21) is equivalent to [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] which establishes the following: Lemma 2 (Privately provided SI): The slope of the reaction function in a setting of private provision of SI depends on how the Arrow-Pratt measure of absolute risk aversion A changes with wealth.
Pratt also shows that the risk premium varies directly with the Arrow-Pratt coefficient of absolute risk aversion.
 As shown in the seminal papers by Sandmo (1971) and Batra and Ullah (1974), for a risk-averse entrepreneurial firm, decreasing absolute risk aversion plays a critical role in establishing unambiguous comparative statics predictions for changes in uncertainty.