Academy of Financial Services
This essay investigates the hypothesis that individuals typically become less risk tolerant as they grow older. More specifically, it investigates individuals’ personal perceptions of their own risk attitudes with respect to different risk domains, these are health, money, career, safety, and leisure domains. The study uses data on the degree of risk tolerance with respect to these five different domains, in addition to individuals’ financial portfolio risk to investigate whether decline in risk tolerance is associated with aging and whether this hypothesis is true regardless of the risk-specific domain. The analysis uses longitudinal data from the Germany.
Author(s): Muna Alabed, Charlene Kalenkoski