Hello,
I'm looking for a way to solve this equation in Stata:
0.1(w+2000000)^(1-r) + 0.9(w-z)^(1-r) = w^(1-r)
where w = individual income
z= willingness to pay for a lottery
I'd like to find r that is the risk preference coefficient.
The data set is at individual level.
Thank you very much for your help!
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