Does Risk Tolerance Decrease with Age?

6 Pages Posted: 15 Jun 1998 Last revised: 19 Jul 2011

See all articles by Hui Wang

Hui Wang

Wells Fargo Bank

Sherman D. Hanna

Ohio State University (OSU)

Abstract

This study examines the effect of age on risk tolerance. The life-cycle investment hypothesis is tested using the 1983-89 panel of the Survey of Consumer Finances. Household wealth is defined as the sum of human capital and net worth. Risk tolerance is measured by the ratio of risky assets to total wealth. Risk tolerance increases with age when other variables are controlled.

JEL Classification: D18, D81, G11

Suggested Citation

Wang, Hui and Hanna, Sherman D., Does Risk Tolerance Decrease with Age?. Financial Counseling and Planning, Vol. 8, Issue 2. Available at SSRN: https://ssrn.com/abstract=95489 or http://dx.doi.org/10.2139/ssrn.95489

Hui Wang

Wells Fargo Bank

United States

Sherman D. Hanna (Contact Author)

Ohio State University (OSU) ( email )

1787 Neil Avenue
Campbell 265D
Columbus, OH 43210
United States
614-292-4584 (Phone)

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