Individual risk attitudes and the composition of financial portfolios: Evidence from German household portfolios

Abstract

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Religious activity, risk-taking preferences and financial behaviour: Empirical evidence from German survey data

“…These findings, which are not presented in the table to economize on space, are in line with former results (Barasinska et al, 2012). In general, women have a lower probability of investing in financial assets, except for other securities, like stocks, which are very volatile and therefore imply high risk.…”

“…Therefore we apply seven different binary outcome variables on self-reported information on financial investments: (1) holding a savings account, (2) holding a savings contract for building a home, (3) holding a life insurance, (4) investments in fixed-interest securities (e.g., savings bonds, bonds or federal savings bonds), (5) holding other securities (e.g., stocks, funds), (6) holding firm assets, and (7) holding no assets. These financial assets can be distinguished not only by their expected returns, but also by their potential risk, which individuals have to face when investing (Barasinska et al, 2012). In each category, systemic risks, like default risks of the issuer or market breakdowns, and non-systemic risks, such as value losses, might be distinguished.…”

The diversity of household assets holdings in the United States in 2007 and 2009: measurement and determinants

“…Only a few studies discuss the diversity measures in the context of asset allocation. Worthington (2009) Another study that looks at naïve diversification (1/n) versus more sophisticated diversification combined with risk aversion is Barasinska et al (2012). They find that investors with a combination of higher risk aversion and less wealth generally have lower asset diversity.…”

Household characteristics and the change of financial risk tolerance during the financial crisis in the United States

“…The life‐cycle model by Bodie, Merton, and Samuelson () shows that young consumers in the labor market with no friction are inclined to have more risky assets; however, liquidity constraints prevent them from investing in risky assets. Therefore, age squared is used to capture opposite effects of these factors on financial risk tolerance in empirical studies (e.g., Barasinska, Schäfer, & Stephan, ; Guiso et al, ).…”

“…Their findings are similar to the studies focusing on household risk tolerance, that is, household characteristics correlated with risk tolerance also correlate with the ownership of foreign assets. Since household portfolios or financial risk tolerance variables are not always available, some studies use the risk attitude, or subjective risk tolerance, as dependent variables and discuss how it is related to household characteristics (e.g., Barasinska et al, ; Coleman, ; Xiao, Alhabeeb, Hong, & Haynes, ). Risk taking attitude, or willingness to take risk, is also used as an explanatory variable for risk tolerance measured by the share of risky assets (e.g., Bertaut, ; Lai & Xiao, ).…”