Financial risk tolerance of individuals from the lens of big five personality traits – a multigenerational perspective

IF 2.3 Q2 BUSINESS, FINANCE

Studies in Economics and Finance Pub Date : 2023-04-17 DOI:10.1108/sef-01-2023-0013

Crystal Glenda Rodrigues, Gopalakrishna B.v

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Abstract

Purpose This study aims to analyse the impact of the big five personality traits on the financial risk tolerance of individuals. Furthermore, it also examines the differences in personality traits and financial risk tolerance across four generations: baby boomers, Generation X, millennials and Generation Z. Design/methodology/approach The data constituted 869 responses from Indian individuals, collected using a self-administered structured questionnaire using a convenience sampling technique. Findings Structural equation modelling analysis showed that openness to experience, extraversion and neuroticism had a significant impact on financial risk tolerance. Multivariate analysis revealed the role of specific personality traits in predicting the financial risk tolerance of generational cohorts. Mean difference showed that millennials and Generation Z had the greatest risk tolerance, whereas the tolerance levels were lower for Generation X and baby boomers. Research limitations/implications This research provides insights into the role of personality on financial risk-taking among generational cohorts in India. Thus, these results cannot be generalised for other risk-taking domains or outside the Indian context. Originality/value This study’s results align with the pulse rate hypothesis of generational theory and contribute to the growing field of behavioural economics and finance. It provides a perspective of the emerging economy of India, where behavioural finance studies are still at a nascent stage.

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从五大人格特征的视角看个人的金融风险承受能力——多代视角

目的本研究旨在分析五大人格特质对个体金融风险承受能力的影响。此外，该研究还研究了婴儿潮一代、X一代、千禧一代和z一代这四代人在性格特征和金融风险承受能力方面的差异。设计/方法/方法数据包括869份来自印度个人的回复，这些回复是通过一份采用方便抽样技术的自我管理结构化问卷收集的。结构方程模型分析表明，经验开放性、外向性和神经质对金融风险承受能力有显著影响。多变量分析揭示了特定人格特质在预测代际群体金融风险承受能力方面的作用。平均差值显示，千禧一代和Z一代的风险容忍度最高，而X一代和婴儿潮一代的风险容忍度较低。研究的局限性/意义本研究提供了对印度各代人在金融风险承担方面的个性作用的见解。因此，这些结果不能推广到其他风险承担领域或印度以外的情况。原创性/价值本研究的结果与代际理论的脉搏率假设相一致，并有助于行为经济学和金融学领域的发展。它提供了对印度新兴经济体的一个视角，在印度，行为金融学研究仍处于起步阶段。

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来源期刊

Studies in Economics and Finance BUSINESS, FINANCE-

CiteScore

4.30

自引率

10.50%

发文量

期刊介绍： Topics addressed in the journal include: ■corporate finance, ■financial markets, ■money and banking, ■international finance and economics, ■investments, ■risk management, ■theory of the firm, ■competition policy, ■corporate governance.