The importance of investment portfolio allocation has become more apparent since the onset of the late 2000s Great Recession. Individual willingness to take financial risks affects portfolio decisions and investment returns among other factors. Previous research found that people of different...

This study used the 1992-2006 waves of the Health and Retirement Study to investigate changes in risk tolerance levels over time in response to stock market returns. Findings indicate that risk tolerance tends to increase when market returns increase and decrease when market returns decrease....

A variety of risk assessment questionnaires are used within the financial planning profession to assess client risk preferences. Evidence indicates that the average person overweighs losses relative to an arbitrary reference point. This paper evaluated risk assessment questions on how well they...

A variety of risk assessment questionnaires are used within the financial planning profession to assess client risk preferences. Evidence indicates that the average person overweighs losses relative to an arbitrary reference point. This paper evaluated risk assessment questions on how well they...

Hypothetical questions were used with 252 students at two universities to elicit values of relative risk aversion and of the elasticity of marginal utility with respect to consumption. Conceptually, the magnitude of these two utility function parameters are plausibly similar, but there was not a...

Assessment of risk tolerance is fundamental to proper asset allocation within a household portfolio. It is also a frequently misunderstood concept and difficult to measure practically. We discuss the relationship between risk aversion and portfolio recommendations based on an expected utility...

This study investigates the effect of risk aversion of single-parent households with at least one child under 18 on life insurance ownership. Analyzing the 1992-2013 Survey of Consumer Finances datasets, we found that the likelihood of owning term life insurance decreases as risk aversion...

Between 2006 and 2008, 9% of Korean households had an income decrease of 50% or more, a rate almost identical to the U.S., despite the much lower impact of the global financial crisis on Korea. We ran a logistic regression to determine factors related to the likelihood of a substantial income...

This research extends the work of Yao, Hanna, and Lindamood (2004) and others in attempting to ascertain how stock market fluctuations affect the risk tolerance of households. We used the 1992 to 2013 datasets of the Survey of Consumer Finances (SCF), and found that whether respondents were...