What question did this study set out to answer?

The research aims to understand the relationship between demographic factors and personal financial risk tolerance.

March 30, 2004Open Access

empirical investigation of personal financial risk tolerance

Key Points

The research aims to understand the relationship between demographic factors and personal financial risk tolerance.
Analyzed a large database of financial risk tolerance scores and demographic data.
Assessed self-assessed risk tolerance in relation to psychometrically derived scores.
Investigated the nonlinear relationship between age and financial risk tolerance.
Self-assessed risk tolerance generally aligns with psychometrically derived financial risk tolerance scores.
Gender, age, marital status, income, and wealth are significantly related to financial risk tolerance.
Age shows a significant nonlinear relationship with risk tolerance, suggesting complexity in this aspect.

Abstract

We analyze a large database of psychometrically derived financial risk tolerance scores (RTS) and associated demographic information. We find that people's self-assessed risk tolerance generally accords with RTS. Furthermore, we find that gender, age, number of dependents, marital status, income, and wealth arc significantly related to the RTS. Notably, the relationship between age and risk tolerance exhibits a significant nonlinear structure.

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Cite This Study

Hallahan et al. (Tue,) studied this question.

synapsesocial.com/papers/69ffee9d2ff633f36577c282 https://doi.org/https://doi.org/10.61190/fsr.v13i1.4782

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