Social Network and Financial Risk Tolerance Among Investors Nearing and During Retirement

Ela Ostrovsky-Berman () and Howard Litwin
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Ela Ostrovsky-Berman: The Hebrew University of Jerusalem
Howard Litwin: The Hebrew University of Jerusalem

Journal of Family and Economic Issues, 2019, vol. 40, issue 2, No 8, 237-249

Abstract: Abstract This study examined the relationship between social networks and one’s tendency to invest in risky assets. We used cross-sectional data from the Survey of Health, Aging and Retirement in Europe (SHARE), including a measure of financial risk preference and detailed information on respondents’ most meaningful social ties. We found that social network is a relevant predictor of the willingness to invest in risky assets. The size of the social network positively correlates with stock ownership, and the components of the network play an important role in investment decisions. Moreover, the propensity to invest in stocks is positively associated with the proportion of the network that is comprised of spouse and friends. However, it is negatively associated with the proportion of the network that is comprised by one’s children.

Keywords: Social network; Stockholding; Portfolio choices; Risk tolerance; SHARE (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s10834-018-9592-5

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