Individual Risk Propensity and Risk Background

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Published: Jan 2, 2013
DOI: https://doi.org/10.5750/jgbe.v2i3.536
Keywords:
Risk propensity background perceptions

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Winston Moore
Department of Economics, University of the West Indies
April Bernard
Osaretin Iyare

Abstract

The paper considers the role that socio-psychological and socio-cultural factors play in individual decisions to take risk.  The study employs four main measures of risk propensity: the mean probability of engaging in an investment, insurance or everyday gamble and the amount that would be invested in a hypothetical lottery.  The study finds that gender had a significant influence on the probability of engaging in investment and everyday risk decisions, but a relatively insignificant impact on insurance decisions.  The most important risk background variables were experience in making gambling decisions and confidence in making investment decisions.  Similar results are obtained when the lottery-type measure of risk was employed.

Article Details

Issue
Vol. 2 No. 3 (2008)
Section
Articles

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