Do financial ethics matter in risky asset investment of households? Evidence from Japan

Hiroyuki Aman (), Taizo Motonishi and Chisako Yamane
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Hiroyuki Aman: Kwansei Gakuin University
Taizo Motonishi: Kansai University
Chisako Yamane: Hiroshima University of Economics

International Journal of Economic Policy Studies, 2024, vol. 18, issue 2, No 3, 387-414

Abstract: Abstract In this study, we examine how financial ethics, defined as an aversive attitude toward financial matters, influence households’ risky asset investments. By using a questionnaire survey on households in Japan, financial ethics are measured on multiple dimensions: psychological attitude toward money, normative attitude toward economic transactions, and unwillingness to disclose financial information. Overall, evidence supports the financial ethics hypothesis that people with a high level of financial ethics are reluctant to invest in risky assets. Particularly, decisions to participate in the stock market are impaired by strong financial ethics. The hypothesis is partly supported for the percentage shares of stock holdings and investment in a broad class of risky assets. Furthermore, our mediation analysis reveals that financial ethics not only directly discourage investment but also have an indirect effect through reduced financial literacy.

Keywords: Household finance; Financial ethics; Risky investment; Questionnaire survey (search for similar items in EconPapers)
JEL-codes: G11 G41 G50 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s42495-024-00134-2

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