Determinants Of Risk Tolerance In The Baby Boomer Cohort

Gilliam, John; Chatterjee, Swarn; Zhu, Dandan

doi:10.19030/jber.v8i5.721

Cited by 26 publications

(24 citation statements)

References 5 publications

(11 reference statements)

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“…Several studies showed that there were a positive association between the levels of education and financial risk tolerance (Donkers, Melenberg and Van-Soest 2001;Chang, DeVaney and Chiremba, 2004;Kimball, Sahm and Shapiro, 2008;and Gilliam, Chatterjee and Zhu, 2010). Bellante and Green (2004) confirmed that the differences in education accounted for larger variations in asset allocation than any other determinants they investigated.…”

Section: Demographic Determinants Of Financial Risk Tolerancementioning

confidence: 75%

“…Grable and Lytton (1999) showed that a higher level of income has a positive effect on willingness to tolerate a risk. Similarly, Hartog, Ferrer-iCarbonell, and Jonker (2000); Faff, Hallahan and McKenzie (2009) and Gilliam, Chatterjee and Zhu (2010) confirmed that risk aversion fell as income or wealth increased. Hallahan, Faff and McKenzie (2004) also presented evidence that wealth and risk tolerance displayed a positive association.…”

Section: Demographic Determinants Of Financial Risk Tolerancementioning

confidence: 78%

“…They showed that females' attitudes toward risk tolerance are lower than males. Several previous studies showed that males are more risk tolerance than females and therefore males preferred more risky assets (Palsson, 1996;Hartog, Ferrer-i-Carbonell, and Jonker, 2000;Al-Ajmi, 2008;Faff, Mulino and Chai, 2008;Frijns, Koellen and Lehnert, 2008;and Gilliam, Chatterjee and Zhu, 2010). Powell and Ansic (1997) concluded that males had a much higher risk tolerance than females regardless the level of their knowledge.…”

Section: Literature Reviewmentioning

confidence: 96%

“…In other words, there is an expectation that financial risk tolerance decreases as individuals get older as younger. Using data of 26,759 residents in USA, Gilliam, Chatterjee and Zhu (2010) examined the differences in financial risk tolerance among older people and younger people. They found that younger people were more risk tolerant than older people.…”

Section: Demographic Determinants Of Financial Risk Tolerancementioning

confidence: 99%

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Does Financial Literacy Moderate the Relationship among Demographic Characteristics and Financial Risk Tolerance? Evidence from Egypt

Shusha¹

2017

AABFJ

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Financial risk tolerance is certainly an important topic for researchers, investors and personal financial planners or consultants. This study purposed to investigate the effect of demographic characteristics on financial risk tolerance among Egyptians. A literature review of demographic determinants of financial risk tolerance showed dialectical results. Therefore, this study attempts to clarify the debatable issues in these results by studying the moderating role of financial literacy in relationships among demographic characteristics and financial risk tolerance. The study sample included 386 respondents representing different segments of Egyptian people. Using the hierarchical regression analysis, the results demonstrated that there were significant effects of gender, age, educational level and annual income on financial risk tolerance. Moreover, the financial literacy moderates the relationships among demographic characteristics of individuals and their tendency to take a risk. AbstractFinancial risk tolerance is certainly an important topic for researchers, investors and personal financial planners or consultants. The study purposed to investigate the effect of demographic characteristics on financial risk tolerance among Egyptians. A literature review of demographic determinants of financial risk tolerance showed dialectical results. Therefore, this study attempts to clarify the debatable of these results by studying the moderating role of financial literacy in relationships among demographic characteristics and financial risk tolerance. The study sample included 386 respondents representing different segments of Egyptian people. Using the hierarchical regression analysis, the results demonstrated that there were significant effects of gender, age, educational level and annual income on financial risk tolerance. Moreover, the financial literacy moderates the relationships among demographic characteristics of individuals and their tendency to take a risk.JEL Classification: N25, D14, D31, G02

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Section: Demographic Determinants Of Financial Risk Tolerancementioning

confidence: 75%

Section: Demographic Determinants Of Financial Risk Tolerancementioning

confidence: 78%

Section: Literature Reviewmentioning

confidence: 96%

Section: Demographic Determinants Of Financial Risk Tolerancementioning

confidence: 99%

See 2 more Smart Citations

Does Financial Literacy Moderate the Relationship among Demographic Characteristics and Financial Risk Tolerance? Evidence from Egypt

Shusha¹

2017

AABFJ

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“…An important implication of these studies is that men in general are more prone to risk-taking behaviour than women, and trade more excessively (Barber & Odean, 2001;Dwyer, Gilkeson, & List, 2002). Gilliam, Chatterjee and Zhu (2010) observed that gender differences in risk tolerance are consistent across generations and when controlling for other personal and household characteristics. A recent study by Faccio, Marchica and Mura (2016) shows that even the chief executive officer (C.E.O.…”

Section: Introductionmentioning

confidence: 93%

Cultural, cognitive and personality traits in risk-taking behaviour: evidence from Poland and the United States of America

Czerwonka

2019

Economic Research-Ekonomska Istraživanja

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The study analyses the susceptibility to risk-taking behaviour in relation to cultural, cognitive and personality traits. For the requirements of the research, undergraduate students with the same major but from two different cultural regions (Poland and the USA) were examined. In order to better understand them, the ten-item personality inventory (TIPI) methoda 10-item measure of the Big-Five personality dimensionswas used. A domain-specific risk-taking (DOSPERT) scale was used to assess risk-taking, while cognitive aspects of behaviour were measured by a cognitive reflection test. It is important to point out that Polish students reported significantly greater proneness to risk-taking than their American counterparts. It was revealed that participants scoring highly in the cognitive reflection test were characterised with lower risk-taking propensity. Consistent with past research, high scores in extraversion and low scores in conscientiousness predicted overall risk-taking behaviour. As follows from the study, men reported significantly greater willingness to take risks than women.

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The importance of staying positive: The impact of emotions on attitude to risk

et al. 2022

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In this article, we examine the impact of emotions towards financial investments and emotions towards life in general on attitudes to financial risk using questionnaire data from 970 UK‐based retail investors. We show that risk tolerance monotonically increases with positive emotions towards investments and life, and decreases with negative emotions. We incorporate a broader range of relevant emotions than in comparable existing studies, and we show, perhaps surprisingly, that positive emotions have a more substantial impact on risk tolerance than negative emotions. We find that emotions towards investments have a considerably greater explanatory power for the cross‐section of risk aversion than gender, age, income, investment experience and investment knowledge. Our research sheds light on the different impacts that integral and background emotions have on retail investor financial decision‐making. We suggest several implications for regulators and financial advisors, and we emphasize the importance for financial educators to support investors in developing emotional resilience.

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Determinants Of Risk Tolerance In The Baby Boomer Cohort

Abstract: Using data from 26,759 respondents, this

Cited by 26 publications

References 5 publications

Does Financial Literacy Moderate the Relationship among Demographic Characteristics and Financial Risk Tolerance? Evidence from Egypt

Does Financial Literacy Moderate the Relationship among Demographic Characteristics and Financial Risk Tolerance? Evidence from Egypt

Cultural, cognitive and personality traits in risk-taking behaviour: evidence from Poland and the United States of America

The importance of staying positive: The impact of emotions on attitude to risk

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