The Cultures of Risk Tolerance

Abstract ( Via Meir Statman-SSRN)

This study explores the links between culture and risk tolerance, based on surveys conducted in 23 countries. Altogether, more than 4,000 individuals participated in the surveys.

Risk tolerance is associated with culture. Risk tolerance is relatively low in countries where uncertainty avoidance is relatively high and in countries which are relatively individualistic. Risk tolerance is also relatively low in countries which are relatively egalitarian and harmonious. And risk tolerance is relatively high in countries where trust is relatively high.

Culture is also associated with risk tolerance indirectly, through the association between culture and income-per-capita. People in countries with relatively high income-per-capita tend to be relatively individualistic, egalitarian, and trusting. Risk tolerance is relatively high in countries with relatively low income-per-capita.

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19. August 2010 by Miguel Barbosa
Categories: Curated Readings, Psychology & Sociology | Leave a comment

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