Document Type

Article

Publication Date

2016

Publication Title

Journal of Behavioral and Experimental Finance

First Page

43

Last Page

55

DOI

http://dx.doi.org/10.1016/j.jbef.2016.01.001

Abstract

We extend existing research that examines the impact of culture on risk tolerance. Using surveys completed by Chinese and American students, we find, consistent with previous studies, that Chinese students perceive themselves as more risk tolerant. However, we find that Chinese students are less consistent in matching their perceived tolerance levels with actual scores from a standard risk tolerance assessment. Further, we also examine mock portfolios created by the respondents and find no evidence that Chinese students create portfolios that are riskier than their American counterparts. Our findings suggest that differences in risk tolerance are at least partially a product of culture, but such differences may not always translate into actual investment decisions.

Rights

This is a post-print version of an article originally published in Journal of Behavioral and Experimental Finance, 2016, Volume 9, Issue 1.

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The version of record is available through: Elsevier.

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