Stated survey measures of risk preferences are increasingly being used in the
literature, and they have been compared to revealed risk aversion primarily by
means of experiments such as lottery choice tasks. In this paper, we
investigate educational choice, which involves the comparison of risky future
income paths and therefore depends on risk and time preferences. In contrast
to experimental settings, educational choice is one of the most important
economic decisions taken by individuals, and we observe actual choices in
representative panel data. We estimate a structural microeconometric model to
jointly reveal risk and time preferences based on educational choices,
allowing for unobserved heterogeneity in the Arrow-Pratt risk aversion
parameter. The probabilities of membership in the latent classes of persons
with higher or lower risk aversion are modelled as functions of stated risk
preferences elicited in the survey using standard questions. Two types are
identified: A small group with high risk aversion and a large group with low
risk aversion. The results indicate that persons who state that they are
generally less willing to take risks in the survey tend to belong to the
latent class with higher revealed risk aversion, which indicates consistency
of stated and revealed risk preferences. The relevance of the distinction
between the two types for educational choice is demonstrated by their distinct
reactions to a simulated tax policy scenario