An Empirical Study About Young People's Risk Preferences and Determinants Affecting them

Abstract

In this report, the aim was to investigate what determinants or associations may affect an individual’s choice when facing different risk-related prospectus. Through surveys based on previous literature, a study on a sample of 119 respondents, containing students from the School of Business, Economics, and Law in Gothenburg was done. The survey focused on different individuals’ determinants and associations. Cognitive abilities, financial literacy, numerical ability and personal traits like gender, age and demographics were studied. All the questions that were asked in the survey have been collected from prior studies created by well-renowned authors. The results from the paper were rather vague regarding the characteristics of interest. Most of them turned out to be insignificant in explaining the dependent variables, but there were still significant results. The data showed that both the CRT-score and financial literacy could be correlated with risk attitude. Men tend to be less risk averse compared to women, and that older people take less risks in general. These findings were in line with prior research.