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Impact of personal economic environment and personality factors on individual financial decision making


Prinz, Susanne; Gründer, Gerhard; Hilgers, Ralf D; Holtemöller, Oliver; Vernaleken, Ingo (2014). Impact of personal economic environment and personality factors on individual financial decision making. Frontiers in Psychology:5:158.

Abstract

This study on healthy young male students aimed to enlighten the associations between an individual's financial decision making and surrogate makers for environmental factors covering long-term financial socialization, the current financial security/responsibility, and the personal affinity to financial affairs as represented by parental income, funding situation, and field of study. A group of 150 male young healthy students underwent two versions of the Holt and Laury (2002) lottery paradigm (matrix and random sequential version). Their financial decision was mainly driven by the factor "source of funding": students with strict performance control (grants, scholarships) had much higher rates of relative risk aversion (RRA) than subjects with support from family (ΔRRA = 0.22; p = 0.018). Personality scores only modestly affected the outcome. In an ANOVA, however, also the intelligence quotient significantly and relevantly contributed to the explanation of variance; the effects of parental income and the personality factors "agreeableness" and "openness" showed moderate to modest - but significant - effects. These findings suggest that environmental factors more than personality factors affect risk aversion.

Abstract

This study on healthy young male students aimed to enlighten the associations between an individual's financial decision making and surrogate makers for environmental factors covering long-term financial socialization, the current financial security/responsibility, and the personal affinity to financial affairs as represented by parental income, funding situation, and field of study. A group of 150 male young healthy students underwent two versions of the Holt and Laury (2002) lottery paradigm (matrix and random sequential version). Their financial decision was mainly driven by the factor "source of funding": students with strict performance control (grants, scholarships) had much higher rates of relative risk aversion (RRA) than subjects with support from family (ΔRRA = 0.22; p = 0.018). Personality scores only modestly affected the outcome. In an ANOVA, however, also the intelligence quotient significantly and relevantly contributed to the explanation of variance; the effects of parental income and the personality factors "agreeableness" and "openness" showed moderate to modest - but significant - effects. These findings suggest that environmental factors more than personality factors affect risk aversion.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:04 Faculty of Medicine > Psychiatric University Hospital Zurich > Clinic for Psychiatry, Psychotherapy, and Psychosomatics
Dewey Decimal Classification:610 Medicine & health
Language:English
Date:2014
Deposited On:16 Jan 2015 15:18
Last Modified:12 Aug 2017 02:29
Publisher:Frontiers Research Foundation
ISSN:1664-1078
Free access at:PubMed ID. An embargo period may apply.
Publisher DOI:https://doi.org/10.3389/fpsyg.2014.00158
PubMed ID:24624100

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