ISSN: 2225-8329
Open access
Investment decisions are usually being complicated by emotional process, mental mistakes and individual personality traits. In almost every important economic decision, the concept of risk in one hand, and uncertainty on the other hand, play a major function. Consequently, the objective of having an understanding and at the same time predicting the behaviour of an economy is intimately linked to understanding individual attitudes towards risk. behavioural finance happens to be a contemporary field that tends to merge the theory of behavioural cognitive psychology with conventional economics and finance with a view to giving reasons on why individuals made financial decisions that are irrational. The focus of behavioural finance is to study the final decision-making process and risk judgement of investors taking into consideration the theories and concepts that influences them. During investment decision making, the behaviour of an investor is affected by several factors. One of such decision influencing factors among others is demographic profile of investors. Different attitudes towards decision making were exhibited by respondents with diverse occupation, marital status, family size, income level, age and gender. They were also grouped into adverse risk and risk seeker.
1. Al-Ajmi, J. Y. (2008). Risk tolerance of individual investors in an emerging market. International Research Journal of Finance and Economics, 17(1), 15-26.
2. Bajtelsmit, V. L., & Bernasek, A. (2001). Risk preferences and the investment decisions of older Americans. AARP, Public Policy Institute.
3. Bajtelsmit, V., & Bernaseck, A. (1996). Why do women invest differently than men? Financial Counselling and Planning, 7(1): 1-10.
4. Barber, B. M., & Odean, T. (2001). Boys will be boys: Gender, overconfidence, and common stock investment. The quarterly journal of economics, 116(1), 261-292.
5. Barberis, N., & Xiong, W. (2012). Realization utility. Journal of Financial Economics, 104(2), 251–271. https://doi.org/10.1016/j.jfineco.2011.10.005
6. Barberis, N., & Thaler, R. (2003). A survey of behavioral finance. Handbook of the Economics of Finance, 1, 1053-1128.
7. Barsky, R. B., Juster, F. T., Kimball, M. S., & Shapiro, M. D. (1997). Preference parameters and behavioral heterogeneity: An experimental approach in the health and retirement study. The Quarterly Journal of Economics, 112(2), 537-579.
8. Bayer, P. J., Bernheim, B. D., & Scholz, J. K. (2009). The effects of financial education in the workplace: Evidence from a survey of employers. Economic Inquiry, 47(4), 605-624.
9. Bellante, D., & Green, C. A. (2004). Relative risk aversion among the elderly. Review of Financial Economics, 13(3), 269-281.
10. Chaulk, B., Johnson, P. J., & Bulcroft, R. (2003). Effects of marriage and children on financial risk tolerance: A synthesis of family development and prospect theory. Journal of Family and Economic Issues, 24(3), 257-279.
11. Christiansen, C., Joensen, J.S. & Rangvid, J. (2006). Gender, Marriage, and the Decision to Invest in Stocks and Bonds: Do Single Women Invest More in Less Risky Assets? D-CAF working paper, (18).?
12. Cohn, R. A., Lewellen, W. G., Lease, R. C., & Schlarbaum, G. G. (1975). Individual investor risk aversion and investment portfolio composition. The Journal of Finance, 30(2), 605-620.
13. Corter, J. E., & Chen, Y. J. (2006). Do investment risk tolerance attitudes predict portfolio risk? Journal of Business and Psychology, 20(3), 369.
14. Croson, R., & Gneezy, U. (2009). Gender differences in preferences. Journal of Economic literature, 47(2), 448-74.
15. Dohmen, T., Falk, A., Huffman, D., Sunde, U., Schupp, J., & Wagner, G. G. (2011). Individual risk attitudes: Measurement, determinants, and behavioral consequences. Journal of the European Economic Association, 9(3), 522-550.
16. Eckel, C. C., & Grossman, P. J. (2008). Forecasting risk attitudes: An experimental study using actual and forecast gamble choices. Journal of Economic Behavior & Organization, 68(1), 1-17.
17. Embrey, L. L., & Fox, J. J. (1997). Gender differences in the investment decision-making process. Financial Counseling and Planning, 8(2), 33-40.
18. Faff, R., Mulino, D., & Chai, D. (2008). On the linkage between financial risk tolerance and risk aversion. Journal of financial research, 31(1), 1-23.
19. Finke, M. S., & Huston, S. J. (2003). The brighter side of financial risk: Financial risk tolerance and wealth. Journal of Family and Economic Issues, 24(3), 233-256.
20. Friend, I. & Blume, M. E. (1975). The Demand for Risky Assets. American Economic Review 65(5): 900–922.
21. Grable, J. and R. Lytton, (1998). Investor risk tolerance: Testing the efficacy of demographics as differentiating and classifying factors. Financial Counselling and Planning, 9(1): 61-73.
22. Grable, J. E., & Joo, S. H. (2000). A cross-disciplinary examination of financial risk tolerance. Consumer Interests Annual, 46, 151-157.
23. Grable, J. E., & Joo, S. H. (2006). Student racial differences in credit card debt and financial behaviors and stress. College Student Journal, 40(2).
24. Grable, J., & Lytton, R. (1999). Assessing Risk Tolerance: Do Demographic, Socioeconomic, and Attitudinal Factors Work? Journal of Family Relations and Human Deve
To cite this article: Alwahaibi, S. S. O. (2019). Is Demographic Information Influence Risk Tolerance/Aversion in Investment Decision? Evidences from Literature Review, International Journal of Academic Research in Accounting, Finance and Management Sciences 9 (1): 111-122
Copyright: © 2019 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode