Risk Aversion Measures

Comparing Attitudes and Asset Allocation

Authors

  • Diane K. Schooley Associate Professor of Finance, Boise State University, Boise, ID 83725
  • Debra Drecnik Worden Assistant Professor of Business and Economics, George Fox University, Newberg, OR 97 132-2697

DOI:

https://doi.org/10.1016/S1057-0810(96)90003-7

Abstract

Households’ reported willingness to take financial risk is compured to the riskiness of their po~olios, measured as risky assets to wealth. Overall, their ~or~olio alio~ations are reliable indicators of attitudes toward risk, demonstrating an understanding of their relative level of risk taking. Multivariate regression analysis using multiply imputed data from the 1989 Survey of Consumer Finances indicates that households generally exhibit decreasing relative risk aversion. Further, investment in risky assets is significantly related to socioeconomic factors, attitude toward risk taking, desire to leave an estate, and expectations about the adequacy of Social Security and pension income.

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Published

1996-12-30

How to Cite

Schooley, D. K., & Worden, D. D. (1996). Risk Aversion Measures: Comparing Attitudes and Asset Allocation. Financial Services Review, 5(2), 87–99. https://doi.org/10.1016/S1057-0810(96)90003-7

Issue

Vol. 5 No. 2 (1996): Financial Services Review

Section

New Original Submission

License

Copyright (c) 1996 JAI Press Inc.

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