TY - JOUR
T1 - On the linkage between financial risk tolerance and risk aversion
AU - Faff, Robert
AU - Mulino, Daniel
AU - Chai, Daniel
N1 - Copyright:
Copyright 2011 Elsevier B.V., All rights reserved.
PY - 2008/3
Y1 - 2008/3
N2 - We explore the linkage between financial risk tolerance (FRT) and risk aversion. To do this, we obtain FRT scores from a psychometrically validated survey and conduct a battery of online lottery choice experiments involving the same nonstudent participants. We contrast: real and hypothetical payoffs, low and high stakes, decisions involving gains and losses, and order effects. Our key finding is that the two approaches to analyzing decision making under uncertainty are strongly aligned. We present evidence that this is particularly the case for the female participants in our sample and when high-stake gambles are employed.
AB - We explore the linkage between financial risk tolerance (FRT) and risk aversion. To do this, we obtain FRT scores from a psychometrically validated survey and conduct a battery of online lottery choice experiments involving the same nonstudent participants. We contrast: real and hypothetical payoffs, low and high stakes, decisions involving gains and losses, and order effects. Our key finding is that the two approaches to analyzing decision making under uncertainty are strongly aligned. We present evidence that this is particularly the case for the female participants in our sample and when high-stake gambles are employed.
UR - http://www.scopus.com/inward/record.url?scp=39349103079&partnerID=8YFLogxK
U2 - 10.1111/j.1475-6803.2008.00229.x
DO - 10.1111/j.1475-6803.2008.00229.x
M3 - Article
AN - SCOPUS:39349103079
SN - 0270-2592
VL - 31
SP - 1
EP - 23
JO - Journal of Financial Research
JF - Journal of Financial Research
IS - 1
ER -