Status, Marriage, and Managers' Attitudes To Risk

Nikolai Roussanov and Pavel Savor

No 17904, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Status concerns can drive risk-taking behavior by affecting the payoff to a marginal dollar of wealth. If status concerns arise endogenously due to competition in the marriage market, then unmarried individuals should take greater risks. We test this hypothesis by studying corporate CEOs. We find that single CEOs are associated with firms exhibiting higher stock return volatility, pursue more aggressive investment policies, and are not affected by increases in idiosyncratic risk. These effects are weaker for older CEOs. Our results also hold when we use variation in divorce laws across states to instrument for CEO marital status.

JEL-codes: D92 G02 G32 (search for similar items in EconPapers)
Date: 2012-03
New Economics Papers: this item is included in nep-dem
Note: AP CF LE PR
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Citations: View citations in EconPapers (5)

Published as "Marriage and Managers' Attitudes to Risk," Nikolai Roussanov and Pavel Savor, current draft: December 2013. Management Science, Volume 60, Issue 10, October 2014

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