Risk-Averse by Nation or by Religion?: Some Insights on the Determinants of Individual Risk Attitudes

Stephan Bartke and Reimund Schwarze

No 131, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: Research findings have proven that the willingness to take risks is distributed heterogeneously among individuals. In the general public, there is a widely held notion that individuals of certain nationalities tend to hold certain typical risk preferences. Furthermore, religious beliefs are thought to explain differences in risk-preparedness on the individual level. We analyze these two possible determinants of individual risk attitudes: nationality and religion. First addressing the study of risk attitudes in a literature review, we then test our hypotheses empirically using the large, representative German Socio-Economic Panel (SOEP). To understand the importance of nationality, we focus on emigrants to Germany. The key findings are: (1) Nationality is not a valid determinant of risk attitudes. It can be broken down into several constituent factors including religion. (2) Religiousness is a significant determinant of risk attitudes. Religious persons are less risk-tolerant than atheists. Moreover, religious affiliation matters: Muslims are less risk-tolerant than Christians.

Keywords: Risk Aversion; Nationality; Immigrants; Religion; Germany (search for similar items in EconPapers)
JEL-codes: D10 D80 D81 J15 Z12 (search for similar items in EconPapers)
Pages: 16 p.
Date: 2008
New Economics Papers: this item is included in nep-cbe, nep-mig and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp131

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