Arrow (1965) and Pratt's (1964) coefficient of relative risk aversion (RRA) has been the standard risk measure since the mid-1960s.
What does RRA stand for?
RRA stands for Relative Risk Aversion
This definition appears frequently and is found in the following Acronym Finder categories:
- Business, finance, etc.
See other definitions of RRA
We have 158 other meanings of RRA in our Acronym Attic
- Red Revolutionary Army
- Red Ribbon Army (gaming)
- Red River Authority (Texas)
- Refitted and Retired Aircraft
- Reform and Restructuring Act
- Refugee Relief Act of 1953
- Regional Reporters Association
- Registered Radiologist Assistant
- Registered Records Administrator
- Registered Research Agency (Australian government)
- Reproductive Rights Alliance
- Requirements Request Action
- Research and Related Activities Account (US NSF)
- Research Review Act
- Resident Research Associateship
- Residual Risk Assessment
- Resource Requirements Analysis
- Restructuring and Reform Act of 1998 (US IRS)
- Rhetoric of Religious Antiquity (various organizations)
- Riddlesdown Residents' Association (UK)
Samples in periodicals archive:
Estimates of Absolute and Relative Risk Aversion To parameterize these utility functions, we need estimates of absolute or relative risk-aversion coefficients.
This [theta] factor, called the factor of constant relative risk aversion is lower as the individual is more willing to decide, more frequently, how much that person consumes in a period of their life and how much in another period (Romer, 1996).
The Epstein-Zin framework separates the parameter governing relative risk aversion from the intertemporal elasticity of substitution (IES).
Krueger and Lustig note that in models with a large number of agents who have constant relative risk aversion preferences, the absence of insurance markets for idiosyncratic labor income risk has no effect on the premium for aggregate risk if the distribution of idiosyncratic risk is independent of aggregate shocks.
4) Let p = -U"/U' and r = Cp denote the usual measures of absolute and relative risk aversion (ARA and RRA), respectively.
h] is the return on human capital for the investor, and R = W[-U'(wealth)/U'(wealth)] is the Pratt's measure of relative risk aversion (RRA), (6) with U(wealth) as the investor's utility function of wealth.