Decomposition Analyses of Racial/Ethnic Differences in High Return Investment Ownership After the Great Recession

2015 ◽  
Vol 26 (1) ◽  
pp. 43-62 ◽  
Author(s):  
Su Hyun Shin ◽  
Sherman D. Hanna
Keyword(s):  
Ethnic Differences ◽  
Decomposition Methods ◽  
Risk Tolerance ◽  
Survey Of Consumer Finances ◽  
Income Risk ◽  
The Great Recession ◽  
Consumer Finances ◽  
High Return ◽  
Tolerance Education ◽  
Racial Ethnic

We investigated racial/ethnic differences in high return investment ownership using the 2010 Survey of Consumer Finances (SCF). Logistic regression analysis shows that even after controlling for income, risk tolerance, education, and other factors, Black and Hispanic households are less likely to hold high return investments than White households, but Asian/Other households are not different from White households. Based on results from decomposition methods, if the households with Black and with Hispanic respondents have the same characteristics and risk tolerance as White households, the racial/ethnic gap in high return investment ownership would be narrowed, but still exists. The Fairlie decomposition method might be more reasonable to use for decomposition analyses than the Blinder-Oaxaca method.

scholarly journals Perceived and Realized Risk Tolerance: Changes During the 2008 Financial Crisis

2016 ◽  
Vol 27 (2) ◽  
pp. 265-276 ◽  
Author(s):  
Diane K. Schooley ◽  
Debra Drecnik Worden
Keyword(s):  
Financial Crisis ◽  
Perceived Risk ◽  
Employment Status ◽  
Life Cycle Stage ◽  
Risk Tolerance ◽  
Portfolio Risk ◽  
Survey Of Consumer Finances ◽  
Consumer Finances ◽  
Tolerance Education ◽  
The 2008 Financial Crisis

Using the 2007–2009 Survey of Consumer Finances panel data, this study examined changes in perceived and realized risk tolerance after the financial crisis. Households who perceived less risk tolerance were more likely to have reduced their portfolio risk and vice versa. Furthermore, households whose wealth decreased were more likely to perceive less risk tolerance and vice versa. Regression analysis revealed that change in risk tolerance as measured by the change in financial portfolio risk is related to perceived risk tolerance, education, life cycle stage, and employment status. Single households, or those households whose head is less educated, or self-employed or unemployed, may need financial advice to prevent them from reducing their portfolio risk in reaction to a financial crisis.

The Great Recession, behavioral health, and self-rated health: An examination of racial/ethnic differences in the US

2021 ◽  
Vol 118 ◽  
pp. 106873
Author(s):  
Nina Mulia ◽  
Yu Ye ◽  
Katherine J. Karriker-Jaffe ◽  
Libo Li ◽  
William C. Kerr ◽  
...  
Keyword(s):  
Behavioral Health ◽  
Ethnic Differences ◽  
Great Recession ◽  
The Great Recession ◽  
Self Rated Health ◽  
The Us ◽  
Racial Ethnic

The Risk Tolerance Measure in the 2016 Survey of Consumer Finances: New, But Is It Improved?

2021 ◽  
pp. JFCP-19-00022
Author(s):  
Kyoung Tae Kim ◽  
Sherman D. Hanna ◽  
Dongyue Ying
Keyword(s):  
Negative Relationship ◽  
Risk Tolerance ◽  
Stock Ownership ◽  
Survey Of Consumer Finances ◽  
Consumer Finances ◽  
Two Measures ◽  
Complex Patterns ◽  
Relationship Of ◽  
The Relationship ◽  
Different Levels

The Survey of Consumer Finances (SCF) has included a 4-level risk tolerance measure since 1983. In 2016, the SCF also included an 11-level risk tolerance measure. We compare the two measures, and develop suggestions for using the new measure. While the new measure is seemingly simpler than the old measure, we demonstrate that it does not have a monotonic relationship with owning stock assets, with a pattern similar to the relationship of the old measure to stock ownership. We also identify complex patterns of factors related to different levels of the new measure, for instance education has a negative relationship at one level but positive at another level. Those using the new measure should consider the complex patterns we demonstrate.

scholarly journals Inter-Observer Risk-Tolerance Agreement Between Husbands And Wives

2011 ◽  
Vol 9 (2) ◽  
Author(s):  
Joseph W. Goetz ◽  
John Gilliam ◽  
John E. Grable
Keyword(s):  
Null Hypothesis ◽  
Financial Risk ◽  
Married Couples ◽  
Risk Tolerance ◽  
Survey Of Consumer Finances ◽  
Chi Square ◽  
Consumer Finances ◽  
Chi Square Analysis ◽  
Financial Risk Tolerance ◽  
Level Of Agreement

<p class="MsoBodyText" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="color: black; font-size: 10pt; mso-themecolor: text1;"><span style="font-family: Times New Roman;">The purpose of this research was to test the extent to which variability in husbands&rsquo; and wives&rsquo; self-assessed financial risk can be attributed to variation in risk tolerance or observer bias resulting from measurement error. Using a sample of 188 well-educated married couples, scores from the Survey of Consumer Finances single risk-assessment item were used to evaluate the following null hypothesis: Husbands and wives do not agree on their level of financial risk tolerance. The hypothesis was tested using a percentage agreement test, a Kappa coefficient test, and a chi-square analysis. Findings led to a rejection of the null hypothesis. That is, couples exhibited general agreement in their assessment of financial risk tolerance, although the level of agreement was rather modest. </span></span></p>

Spending Behavior Change and Financial Distress During the Great Recession

2017 ◽  
Vol 28 (1) ◽  
pp. 49-61 ◽  
Author(s):  
Lekhnath Chalise ◽  
Sophia Anong
Keyword(s):  
Great Recession ◽  
Financial Distress ◽  
Good Health ◽  
Risk Tolerance ◽  
Mortgage Loan ◽  
Average Risk ◽  
Time Data ◽  
The Great Recession ◽  
Consumer Finances ◽  
Financially Distressed

This study investigated whether spending habits before and during the Great Recession predicted financial distress. Financial distress was defined as failing to make mortgage and non-mortgage loan payments on time. Data from the 2007–2009 panel of the Survey of Consumer Finances revealed that one’s prerecession spending habit did not seem to matter. Respondents who reported in the earlier wave that they spent more than income but had begun to spend less than income during the recession were twice as likely to become financially distressed. However, those who were spending more than their income during the recession were three times as likely to be financially distressed. Being in good health, having income certainty, and above average risk tolerance lowered the odds of financial distress.

scholarly journals Racial and Ethnic Differences in Consumers’ Economic Expectations

2019 ◽  
Vol 5 ◽  
pp. 237802311881527
Author(s):  
Megan Doherty Bea
Keyword(s):  
Ethnic Differences ◽  
Race And Ethnicity ◽  
The United States ◽  
Ethnic Composition ◽  
Ethnic Variation ◽  
Survey Of Consumer Finances ◽  
Racial And Ethnic Differences ◽  
Consumer Finances ◽  
Economic Expectations ◽  
Economic Experiences

Consumers’ expectations about the future of their own finances and the macroeconomy are used to forecast consumption, but forecasts do not typically account for differences by race and ethnicity. In this report, the author asks (1) whether there is consistent racial and ethnic variation in consumers’ economic expectations, (2) if differences can be explained by economic experiences, and (3) how the scope of expectations matters. The author uses the Survey of Consumer Finances to examine variation in the likelihood of positive national and personal economic expectations among individuals who identify as black, white, or Hispanic. The author finds that national expectations have substantial racial and ethnic variation net of economic experiences. For personal expectations, initial racial and ethnic variation in the likelihood of positive expectations disappears once economic experiences are accounted for. These findings have important implications for consumption forecasts, especially as the racial and ethnic composition of the United States changes.

scholarly journals Impact of Economic Shocks on Cumulative Advantage Processes: Recession, Recovery, and Trajectories of Inequality

2021 ◽  
Vol 5 (Supplement_1) ◽  
pp. 508-508
Author(s):  
Stephen Crystal
Keyword(s):  
Potential Role ◽  
Population Level ◽  
Survey Of Consumer Finances ◽  
Subsequent Recovery ◽  
The Great Recession ◽  
Consumer Finances ◽  
Age Cohort ◽  
Using Data ◽  
The Life Course

Abstract This study compares the effect of the 2008 recession and subsequent recovery across generational cohorts by evaluating age-cohort trajectories of income inequality. Using data from the 2007 to 2016 waves of the Survey of Consumer Finances, we examine the trajectory of inequality for the overall population and by cohort in years spanning the Great Recession and subsequent recovery. We find that increases in per-capita income and wealth observed at the population-level during the recovery were not reflected among households below the median, leading to increasing inequality. Within cohorts, we observe growing inequality within cohorts in their primary working years. Findings are consistent with a model of integrative cumulative dis/ advantage, which predicts increasing within-cohort inequality over the life course influenced both by persistent micro- and macro-level processes of increasing heterogeneity. Our analyses highlight the potential role of extreme business cycle fluctuations, booms and busts, to exacerbate this underlying process.

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