• Values influencing Financial Risk-Taking (FRT) in UK households is investigated. • The study uses a structured survey on 215 respondents. • Household risk-taking is mostly intentional. • Households rely on their financial literacy during FRT activities. • Households reduce risk-taking under threatening social environments. What values drive financial risk-taking (FRT) in a household context? This study examines this question using a structured questionnaire survey on UK households, through the lenses of the theory of planned behaviour, value-belief-norm theory, and Rokeach values. The results indicate 1) a strong presence of intentional risk-takers (to whom risk is part of a household financial plan), 2) who rely on better financial knowledge to capitalize on FRT, and 3) reduce FRT if their perceived personal and family risks increase. Contrary to stereotypes, our results support that men are more risk-averse than women, due to higher uncertainty in the post-COVID period that affected household income and wealth. In the post-crisis period, there is an incentive to act on behalf of the household, influenced by altruistic values. There is a significant influence of risk adaptation in financially knowledgeable households. This challenges the traditional connection between risk and return: return is not only a function of perceived financial risk, but also associated with household and social risks. The results carry implications for financial markets, and potentially household and personal financial advice, given the rise of values in financial decision-making within and outside the household.
Kim et al. (Fri,) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: