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Risk Aversion and Age

As I jauntily ease into my graying years, I've notice a pattern in my own perceptions that I always "saw" in others as they aged but would never have expected to experience myself.

My old-time background in economic utility theory and decision analysis always included "value-of-life" calculations (i.e. What is the dollar value of a life-saved by any particular decision or policy implementation based on a multitude of factors). Obviously, the younger an individual is, the more value of life is "left" (more years of earning, parenting etc.).

This plays directly into the evaluation and execution of "risky behaviour" (think sky diving, high-risk road riding for example). My background tells me that facing the same probability of death when I was 20 is WORSE than facing that same probability now that I'm very significantly past 20.

Put another way, my lower value-of-life now should imply that I have lower risk aversion (i.e. higher tolerance for risky activity) as an older individual.

HOWEVER, I find myself succumbing to what I saw in individuals "ahead" of me in aging, i.e. as they aged they became more risk averse. I find myself becoming more risk averse even though I consciously know that now is the perfect time to take more risk! My children are grown; I have no major financial commitments and my wife and I are still healthy enough to do pretty much any activity available.

  • Is this a Type I/II or fast-brain/slow-brain distinction? Why do I feel more risk averse now?

  • Is it a desire to attend future life events? (e.g. wanting to see potential grand-children? see second-child married?)

  • Is it bias from media that implies we should "slow down" in our older years? Even when you know the bias is there, is it harder to continually and knowingly push against it?

Fascinating to actually see and concurrently attempt to analyze changes in my risk perception over time that contradict what my "logical" brain tells me.

Papers and research in this area are appreciated...let me know if you see anything related to this!