A Cross-Cultural Study in Risk Tolerance: Comparing Chinese and Americans

Abstract

In this research we compare the risk preference attitudes and behavior between a sample of 470 Chinese workers and a sample of 2,671 Americans from the Survey of Consumer Finances. Our findings show that Chinese in our sample are more risk tolerant than Americans in their financial decisions, both in attitudes and behavior. Alternative explanations such as a lack of knowledge about the relationship between risk and return among the current generation Chinese are also explored. Theoretical and practical implications of this research are discussed.

Keywords: risk tolerance, Cultural comparison, Chinese consumers, American consumers