A Meta-analysis of Age-related effect on Loss Aversion

Prospect Theoretic Loss aversion (λ) suggests we overvalue losses compared to gains during decision making but the influence of age on loss aversion is unclear. We conducted a random-effects meta-analysis on 7 studies that measured loss aversion and the age of participants. The pooled estimate (β=0.0886, 95%CI [0.0087 0.1686] revealed an effect of age on loss aversion. Considering age as continuous (n=1103, 5 studies; β = -0.005233, t= -2.511, p = 0.0122) or categorical (n=1856, 8 studies; β=0.00856, t= 0.111, p = 0.912) reflected substantial differences. Dividing participants broadly (< 46 and > 45 years) to explore differences in estimates of loss aversion (λ>1, λ =1, λ<1), also found significant differences, X2 (2, 1856)=7.5362, p = 0.0231. These findings underscore the veracity of meta-analysis for advancing and explicating previously underexplored aspects of decision theory.