Individual Risk Propensity and Risk Background

April Bernard, Sunday Osaretin Iyare and Winston Moore

Journal of Gambling Business and Economics, 2008, vol. 2, issue 3, 53-70

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.

Keywords: RISK PROPENSITY; BACKGROUND; PERCEPTIONS (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Date: 2008
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Journal of Gambling Business and Economics is currently edited by Leighton Vaughan Williams, Nottingham Business School

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