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  • Thumbnail for Demographic and Socioeconomic Factors That Affect an Individual’s Financial Risk Tolerance
    Demographic and Socioeconomic Factors That Affect an Individual’s Financial Risk Tolerance by Seu, Risa

    I use the 2016 Survey of Consumer Finance (SCF) from the Federal Reserve and examine the impact of demographic and socioeconomic variables on people’s financial risk willingness, as well as percentage of stocks, bonds, and mutual funds. I compare the results of these regressions to infer what variables allow people to be more risk tolerant. The results show that being Black/Hispanic and having financial dependents decreases people’s financial risk tolerance. On the other hand, people in the categories never married, greater income, higher education, positive outlook of the economy for the next five years, and work in the finance industry have greater risk tolerance than their counterparts.