An empirical investigation of personal financial risk tolerance

Authors

  • Terrence A. Hallahan RMIT University, Melbourne
  • Robert W. Faff Monash University, Australia
  • Michael D. McKenzie RMIT University, Melbourne

DOI:

https://doi.org/10.61190/fsr.v13i1.4782

Keywords:

Risk assessment, Risk tolerance

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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Published

2004-03-30

Issue

Vol. 13 No. 1 (2004): FSR Spring 2004

Section

New Original Submission

License

Copyright (c) 2004 Academy of Financial Services

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How to Cite

An empirical investigation of personal financial risk tolerance. (2004). Financial Services Review, 13(1), 57-78. https://doi.org/10.61190/fsr.v13i1.4782