LAUSR

We present an extension of the classic rational choice model for educational decisions that is able to explain recent empirical findings by Gabay-Egozi et al. who established that Israeli students from disadvantaged social strata tend to hedge long-term utility with short-term risk when choosing among subjects for their matriculation exams. Adding to that, we show that the assumption of relative risk aversion as formulated in the Breen–Goldthorpe Model can be relaxed to a significant degree without losing its explanatory power regarding the persistence of class differentials in educational choices. This fact casts considerable doubt on the measurement of relative risk aversion in empirical research on the Breen–Goldthorpe Model and hence on the interpretation of the results of such studies.