Studies like this seem to fall into two categories:
a) those that don't really discuss risk tolerance or risk aversion at all, but simply take it for granted that
everyone in the world is happier with a 50% chance of $2 million/50% chance of $0.5 million, than with a 100% sure-thing of $1 million. Why? because rationally they ought to be happier.
b) those that incorporate a metric and model of risk aversion, and conclude that retirees with a risk aversion of 3.14 should do one thing and those with risk aversion of 2.72 should do another--but give no clue as to how to measure risk aversion in the real world, or validate any measurements that are made. Those stupid questionnaires that everyone, including Vanguard, uses, are about as reliable as asking someone one of those horns-of-the-dilemma party game questions--like whether you would be willing to lose their left pinky finger in return for $100,000.
What there seems to be darn little of is studies like Hannes Schwandt, 2014,
Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations. Despite the scorn sometimes expressed for "volatility as risk," this paper suggests that volatility might literally be hazardous to health.
We ought to know a lot more about the effect of financial volatility on elders before we casually recommend high stock allocations to octogenarians. (Surely a high annual rate of return becomes
less and less important as a person has fewer and fewer years in which to earn it?)
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.