Religious Activity, Risk Taking Preferences, and Financial Behaviour: Empirical Evidence from German Survey Data

Anja Koebrich Leon () and Christian Pfeifer ()
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Anja Koebrich Leon: Institute of Economics, Leuphana University Lueneburg, Germany

No 269, Working Paper Series in Economics from University of Lüneburg, Institute of Economics

Abstract: Individual preferences with respect to risk taking play an important role in financial economic behaviour and, hence, in financial markets. Using German microdata, we argue that individual religiosity is a determinant of household willingness to take risks, since it shapes relevant individual values and norms. Controlling for overall level of general risk assessment, firstly, we find that different religious affiliations are associated with distinct financial risk-taking attitudes. Adherents to the two main Christian religions in Germany (Protestants and Catholics) are less risk-tolerant in general, but not in financial concerns. The same holds for Muslims. Further, religious involvement is associated with higher risk aversion. Secondly, we examine the extent to which religion-induced heterogeneity in risk-taking preferences actually influences investment decisions of individuals in Germany. We provide evidence suggesting that religious beliefs and religious involvement influence individual portfolio decisions.

Keywords: church; religion; risk aversion; portfolio choice (search for similar items in EconPapers)
JEL-codes: D14 G11 Z12 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2013-04
New Economics Papers: this item is included in nep-cbe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Journal Article: Religious activity, risk-taking preferences and financial behaviour: Empirical evidence from German survey data (2017)
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