Risk-Averse by Nation or by Religion? Some Insights on the Determinants of Individual Risk Attitudes

18 Pages Posted: 20 Oct 2008

See all articles by Stephan Bartke

Stephan Bartke

UFZ - Helmholtz-Centre for Environmental Research

Reimund Schwarze

Helmholtz Centre for Environmental Research - UFZ (Leipzig); European University Viadrina Frankfurt (Oder) - Department of Economics

Date Written: October 2008

Abstract

Research findings have proven that the willingness to take risks is distributed heterogeneously among individuals. In the general public, there is a widely held notion that individuals of certain nationalities tend to hold certain typical risk preferences. Furthermore, religious beliefs are thought to explain differences in risk-preparedness on the individual level. We analyze these two possible determinants of individual risk attitudes: nationality and religion. First addressing the study of risk attitudes in a literature review, we then test our hypotheses empirically using the large, representative German Socio-Economic Panel (SOEP). To understand the importance of nationality, we focus on emigrants to Germany. The key findings are: (1) Nationality is not a valid determinant of risk attitudes. It can be broken down into several constituent factors including religion. (2) Religiousness is a significant determinant of risk attitudes. Religious persons are less risk-tolerant than atheists. Moreover, religious affiliation matters: Muslims are less risk-tolerant than Christians.

Keywords: Risk Aversion, Nationality, Immigrants, Religion, Germany

JEL Classification: D10, D80, D81, J15, Z12

Suggested Citation

Bartke, Stephan and Schwarze, Reimund, Risk-Averse by Nation or by Religion? Some Insights on the Determinants of Individual Risk Attitudes (October 2008). SOEPpaper No. 131. Available at SSRN: https://ssrn.com/abstract=1285520 or http://dx.doi.org/10.2139/ssrn.1285520

Stephan Bartke

UFZ - Helmholtz-Centre for Environmental Research ( email )

Department of Economics
Permoserstr. 15
Leipzig, DE 04318
Germany
++493412351683 (Phone)
++49341235451683 (Fax)

HOME PAGE: http://www.ufz.de/index.php?en=15808

Reimund Schwarze (Contact Author)

Helmholtz Centre for Environmental Research - UFZ (Leipzig) ( email )

Permoserstra├če 15
Leipzig, 04318
Germany

European University Viadrina Frankfurt (Oder) - Department of Economics ( email )

Grosse Scharrnstr. 59
D-15230 Frankfurt (Oder)
Germany

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