Risk aversion vs. individualism: what drives risk taking in household finance?

被引:84
作者
Breuer, Wolfgang [1 ]
Riesener, Michael [1 ]
Salzmann, Astrid Juliane [1 ]
机构
[1] Rhein Westfal TH Aachen, Dept Finance, D-52056 Aachen, Germany
关键词
risk taking; risk aversion; individualism; household finance; ATTITUDES; CULTURE; OVERCONFIDENCE; PSYCHOLOGY; SELF;
D O I
10.1080/1351847X.2012.714792
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Despite a considerable premium on equity with respect to risk-free assets, many households do not own stocks. We ask why the prevalence of stockholding is so limited. We focus on individuals' attitudes toward risk and identify relevant factors that affect the willingness to take financial risks. Our empirical evidence contradicts standard portfolio theory, as it does not indicate a significant relationship between risk aversion and financial risk taking. However, our analysis supports the behavioral view that psychological factors rooted in national culture affect portfolio choice. Individualism, which is linked to overconfidence and overoptimism, has a significantly positive effect on financial risk taking. In microdata from Germany and Singapore, as well as in cross-country data, we find evidence consistent with low levels of individualism being an important factor in explaining the limited participation puzzle.
引用
收藏
页码:446 / 462
页数:17
相关论文
共 48 条
[1]   Nature or nurture: What determines investor behavior? [J].
Barnea, Amir ;
Cronqvist, Henrik ;
Siegel, Stephan .
JOURNAL OF FINANCIAL ECONOMICS, 2010, 98 (03) :583-604
[2]   Preference parameters and behavioral heterogeneity: An experimental approach in the health and retirement study [J].
Barsky, RB ;
Juster, FT ;
Kimball, MS ;
Shapiro, MD .
QUARTERLY JOURNAL OF ECONOMICS, 1997, 112 (02) :537-579
[3]   Financial Institutions and Markets across Countries and over Time: The Updated Financial Development and Structure Database [J].
Beck, Thorsten ;
Demirguc-Kunt, Asli ;
Levine, Ross .
WORLD BANK ECONOMIC REVIEW, 2010, 24 (01) :77-92
[4]   Portfolio Inertia and Stock Market Fluctuations [J].
Bilias, Yannis ;
Georgarakos, Dimitris ;
Haliassos, Michael .
JOURNAL OF MONEY CREDIT AND BANKING, 2010, 42 (04) :715-742
[5]   Retail banking and behavioral financial engineering: The case of structured products [J].
Breuer, Wolfgang ;
Perst, Achim .
JOURNAL OF BANKING & FINANCE, 2007, 31 (03) :827-844
[6]   Household finance [J].
Campbell, John Y. .
JOURNAL OF FINANCE, 2006, 61 (04) :1553-1604
[7]  
Carpenter J., 2003, FIELD EXPT EC, P261
[8]   PORTFOLIO CHOICE AND RISK ATTITUDES: AN EXPERIMENT [J].
Charness, Gary ;
Gneezy, Uri .
ECONOMIC INQUIRY, 2010, 48 (01) :133-146
[9]   Cognitive abilities and portfolio choice [J].
Christelis, Dimitris ;
Jappelli, Tullio ;
Padula, Mario .
EUROPEAN ECONOMIC REVIEW, 2010, 54 (01) :18-38
[10]   Individualism and Momentum around the World [J].
Chui, Andy C. W. ;
Titman, Sheridan ;
Wei, K. C. John .
JOURNAL OF FINANCE, 2010, 65 (01) :361-392