scholarly journals Invest As I Say, Not As I Do? Gender Dif-ferences In Financial Risk Preferences

2011 ◽  
Vol 1 (1) ◽  
Author(s):  
Nancy Ammon Jianakoplos
Keyword(s):  
Gender Differences ◽  
Asset Allocation ◽  
Financial Risk ◽  
Risk Preferences ◽  
Financial Risks ◽  
Financial Assets ◽  
Survey Of Consumer Finances ◽  
Risky Assets ◽  
Consumer Finances ◽  
Using Data

This paper examines gender differences in stated versus observed financial risk preferences. The responses of women versus men to a question regarding financial risk preferences are compared to the proportion of risky assets held in their portfolios using data from the 1995 Survey of Consumer Finances. The data show that women are more likely to express an unwillingness to take financial risks. Stated financial risk preferences are found to be consistent with observed risk preferences at the ordinal, but not the quantitative, level. Contradicting their stated risk preferences, risky assets constitute, on average, one-third of the financial assets of households that indicate they are unwilling to take any financial risks. Financial planners and advisers frequently use a clients expressed willingness to take on risk as an important determinant in asset allocation recommendations. Consistent gender differences in these responses, in addition to inconsistencies between the clients stated risk preferences and observed portfolio allocation, may lead advisers to make inappropriate recommendations.

Household Expectations for Future Economy and Risk-Taking Attitudes

2016 ◽  
Vol 27 (1) ◽  
pp. 109-121 ◽  
Author(s):  
Tsung Huang ◽  
Xin Xu ◽  
Tsun-Feng Chiang
Keyword(s):  
Risk Taking ◽  
Financial Risk ◽  
Financial Risks ◽  
Survey Of Consumer Finances ◽  
Logit Regression ◽  
Consumer Finances ◽  
Multinomial Logit Regression ◽  
Working People ◽  
New Finding ◽  
Financial Issues

The purpose of this study is to examine factors associated with households’ willingness to take financial risks, particularly the effect of households’ expectations. The data used in this study are the Survey of Consumer Finances 2007 by which researchers can examine the household financial issues before the financial crisis. By employing multinomial logit regression, the new finding of this study is that when the households expect that the future economy will be better, they are not willing to take either no or substantial financial risk. This study uses the uncertainty theory with the timing of the survey to interpret this seemingly unintuitive result. Other findings are that age, more working people in a household, male, education, and majority race are household characteristics positively affecting the probability of the household’s willingness to take average and above average financial risks.

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>

scholarly journals Inequality and market concentration, when shareholding is more skewed than consumption

2019 ◽  
Vol 35 (3) ◽  
pp. 550-563 ◽  
Author(s):  
Joshua Gans ◽  
Andrew Leigh ◽  
Martin Schmalz ◽  
Adam Triggs
Keyword(s):  
The United States ◽  
Relative Distribution ◽  
Consumer Expenditure ◽  
Survey Of Consumer Finances ◽  
Consumer Expenditure Survey ◽  
Consumer Finances ◽  
Equity Ownership ◽  
Using Data ◽  
The Impact ◽  
Over Time

AbstractEconomic theory suggests that monopoly prices hurt consumers but benefit shareholders. But in a world where individuals or households can be both consumers and shareholders, the impact of market power on inequality depends in part on the relative distribution of consumption and corporate equity ownership across individuals or households. The paper calculates this distribution for the United States, using data from the Survey of Consumer Finances and the Consumer Expenditure Survey, spanning nearly three decades from 1989 to 2016. In 2016, the top 20 per cent consumed approximately as much as the bottom 60 per cent, but had 15 times as much corporate equity. Because ownership is more skewed than consumption, increased mark-ups increase inequality. Moreover, over time, corporate equity has become even more skewed relative to consumption.

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.

scholarly journals Financial Profiles of Workers Most Vulnerable to Coronavirus-Related Earnings Loss in the Spring of 2020

2020 ◽  
Vol 2020 (093) ◽  
pp. 1-27
Author(s):  
Brooke Helppie-McFall ◽  
◽  
Joanne W. Hsu ◽  
Keyword(s):  
People Of Color ◽  
Income Shocks ◽  
Survey Of Consumer Finances ◽  
Consumer Finances ◽  
Earnings Losses ◽  
Policy Measures ◽  
Using Data ◽  
Wage Earners

In spring 2020, the COVID-19 pandemic and related shutdowns had huge effects on unemployment. Using data from the Survey of Consumer Finances, we describe the financial profiles of US families whose workers were most vulnerable to coronavirus-related earnings losses in the spring of 2020, based on whether a particular worker was deemed "essential" and whether a worker's job could be conducted remotely. We use descriptive analytic techniques to examine how families' baseline financial situations would allow them to weather COVID-shutdown-related earnings losses. We find that families with non-teleworkable workers who were most vulnerable to layoff also had both demographic and financial profiles that are associated with greater vulnerability to income shocks: non-teleworkable families were more likely to be people of color and single wage-earners, and also to have less savings. The median non-teleworkable family, whether in non-essential or essential occupations, held only three weeks of income in savings, underscoring the importance of policy measures to blunt the financial effect of the COVID crisis.

scholarly journals Do Employee Share Owners Face Too Much Financial Risk?

ILR Review ◽  
2021 ◽  
pp. 001979392110073
Author(s):  
Douglas Kruse ◽  
Joseph Blasi ◽  
Dan Weltmann ◽  
Saehee Kang ◽  
Jung Ook Kim ◽  
...  
Keyword(s):  
Financial Risk ◽  
Risk Tolerance ◽  
Risk Theory ◽  
Financial Knowledge ◽  
Survey Of Consumer Finances ◽  
Small Minority ◽  
Share Ownership ◽  
Consumer Finances ◽  
Substantial Problem ◽  
Excessive Risk

A major theoretical objection against employee share ownership is that workers are exposed to excessive financial risk. Theory posits that 10 to 15% of a typical worker’s wealth portfolio can be prudently invested in employer stock. The authors analyze employee share ownership in US family portfolios using the 2004 to 2016 Survey of Consumer Finances. Overall, 15.3% of families with private-sector employees held employer stock in 2016, and one in six of these families exceeded the 15% threshold. Employee share ownership appears to generally add to, rather than substitute for, both pension and overall wealth. Employee share owners express higher risk tolerance and financial knowledge and greater understanding of the value of diversification. While financial risk does not appear to be a substantial problem for most employee share owners, a small minority may face excessive risk, and the authors suggest approaches to reduce such risk.

scholarly journals Confidence, Financial Literacy and Investment in Risky Assets: Evidence from the Survey of Consumer Finances

2020 ◽  
Vol 2020 (004) ◽  
Author(s):  
◽  
Andrej Cupák ◽  
Pirmin Fessler ◽  
Joanne W. Hsu ◽  
Piotr R. Paradowski ◽  
...  
Keyword(s):  
Financial Literacy ◽  
Survey Of Consumer Finances ◽  
Risky Assets ◽  
Consumer Finances

scholarly journals Employer-Provided Health Insurance and Retirement Behavior

ILR Review ◽  
1994 ◽  
Vol 48 (1) ◽  
pp. 124-140 ◽  
Author(s):  
Alan L. Gustman ◽  
Thomas L. Steinmeier
Keyword(s):  
Health Insurance ◽  
Private Health Insurance ◽  
Health Benefits ◽  
Retirement Age ◽  
Survey Of Consumer Finances ◽  
Consumer Finances ◽  
National Medical ◽  
Retirement Behavior ◽  
Using Data ◽  
The Cost

Using data from the 1969–79 Retirement History Study, the 1977 National Medical Care Expenditure Survey, the 1983–86 Survey of Consumer Finances, and the 1988 Current Population Survey, the authors analyze, with a structural retirement model, the effect on retirement of employer-provided health benefits. Such benefits, they find, tend to delay retirement until the age of eligibility and afterward to accelerate it. The net effect is small: employer-provided health benefits lowered male retirement age by only about 1.3 months. Valuing health benefits at the price of private health insurance to unaffiliated men, rather than at the cost to employers, increases the effect. Ignoring retiree health benefits in retirement models creates only a small bias.

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