INFLUENCE OF SOCIO-DEMOGRAPHIC CHARACTERISTICS, FINANCIAL LITERACY AND MOOD ON FINANCIAL RISK TOLERANCE

Ali Osman Oztop; Ezgi Kuyu

doi:10.17261/Pressacademia.2020.1297

Araştırma Makalesi

INFLUENCE OF SOCIO-DEMOGRAPHIC CHARACTERISTICS, FINANCIAL LITERACY AND MOOD ON FINANCIAL RISK TOLERANCE

Yıl 2020, Cilt: 9 Sayı: 3, 209 - 222, 30.09.2020

Ali Osman Oztop , Ezgi Kuyu

https://doi.org/10.17261/Pressacademia.2020.1297

Öz

The Purpose- Risk is an inherent element of any kind of financial investment instruments. The aim of this study is to determine the factors affecting financial risk tolerance of the individuals. Additionally, this study analyses the role of mood in the financial risk tolerance.
Data and Methodology- Data were collected using a survey questionnaire. 588 questionnaires were completed and used for analysis. This study employs an ordered logit model (OLM) to validate and assess proposed research model.
Results- According to the results of the study, there is a statistically positive and significant relationship between both positive emotional state and age and financial risk tolerance. On the other hand, there is no significant relationship between gender, income, having children, financial literacy and financial risk tolerance. The results of this study indicate that the moment of decision making is important because of risk tolerance of individuals is affected by positive emotional state as well as age.
Conclusion– This study shows that both financial knowledge and positive mood are strong determinants of financial risk tolerance. Surprisingly, there is no relation between gender, income level, having children, financial literacy level and the dependent variable financial risk tolerance level. Financial risk tolerance which shapes financial decision making process is influenced by the individual's biopsychosocial and environmental factors rather than rational choice theory.

Anahtar Kelimeler

Financial literacy, behavioral finance, mood, financial risk tolerance, ordered logit model

Kaynakça

Ackert, L. F., Church, B. K., & Deaves, R. (2003). Emotion and Financial Markets. Economic Review - Federal Reserve Bank of Atlanta, 88(2), 33–41. http://doi.org/10.1017/CBO9781107415324.004
Agarwal, S., Amromin, G., Ben-David, I., Chomsisengphet, S., & Evanoff, D. D. (2015). Financial literacy and financial planning: Evidence from India. Journal of Housing Economics, 27, 4–21. http://doi.org/10.1016/j.jhe.2015.02.003
Alpay, E. E., Yavuz, M., & Kahyaoğlu, M. B. (2015). Gelir Durumunun Risk Algısına Etki Eden Diğer Sosyo-Ekonomikve Demografik Faktörler Üzerindeki Etkisi. Cumhuriyet Üniversitesi İktisadi ve İdari Bilimler Dergisi, 16(1), 205–226.
Anbar, A., & Eker, M. (2009). Bireysel yatırımcıların finansal risk algılamalarını etkileyen demografik ve sosyoekonomik faktörler. ZKU Journal of Social Sciences, 5(9), 129–150.
Aren, S., & Zengin, A. N. (2016). Influence of Financial Literacy and Risk Perception on Choice of Investment. Procedia - Social and Behavioral Sciences, 235(February), 656–663. http://doi.org/10.1016/j.sbspro.2016.11.047
Arı, E.& Yıldız, Z. (2014). Parallel Lines Assumption in Ordinal Logistic Regression and Analysis Approaches, International Interdisciplinary Journal of Scientific Research, Vol. 1, No. 3 pp. 8-23.
Au, K., Chan, F., Wang, D., & Vertinsky, I. (2003). Mood in foreign exchange trading: Cognitive processes and performance. Organizational Behavior and Human Decision Processes, 91(2), 322–338. http://doi.org/10.1016/S0749-5978(02)00510-1
Awais, M., Laber, M. F., Rasheed, N., & Khursheed, A. (2016). Impact of Financial Literacy and Investment Experience on Risk Tolerance and Investment Decisions: Empirical Evidence from Pakistan. International Journal of Economics and Financial Issues, 6(1), 73–79.
Bashir, T., Azam, S. N., Butt, S. A. A., Javed, S. A., & Tanvir, S. A. (2013). Are Behavioral Biases Influenced By Demographic Characteristics & Personality Traits? Evidence From Pakistan. European Scientific Journal, 9(29), 277–293.
Brown, S., & Taylor, K. (2002). Wage Growth , Human Capital and Risk Preference : Evidence from the British Household Panel Survey. Retrieved April 9, 2018, from https://www.le.ac.uk/economics/research/RePEc/lec/leecon/econ02-14.pdf?uol_r=d307e306
Calcagno, R., & Monticone, C. (2015). Financial literacy and the demand for financial advice. Journal of Banking & Finance, 50, 363–380. http://doi.org/10.1016/j.jbankfin.2014.03.013
Ceyhan, G. (2008). Yaşam Biçimlerinin Finansal Risk Toleransına Olan Etkileri Üzerine Bir Uygulama (Basılmamış Yüksek Lisans Tezi). Hacettepe Üniversitesi Sosyal Bilimler Enstitüsü, Ankara.
Chaffai, M., & Medhioub, I. (2014). Behavioral finance: An empirical study of the Tunisian stock market. International Journal of Economics and Financial Issues, 4(3), 527–538.
Chavali, K., & Mohanraj, M. P. (2016). International Journal of Economics and Financial Issues Impact of Demographic Variables and Risk Tolerance on Investment Decisions: An Empirical Analysis. International Journal of Economics and Financial Issues, 6(1), 169–175.
Chen, C. K.&Hughes, J. (2004). Using Ordinal Regression Model to Analyze Student Satisfaction Questionnaires, Association for Institutional Research, Vol. 1, 2004, 1-13.
Cihangir, M., Şak, N., & Bilgin, Ş. (2016). Bireysel Yatırımcı Demografileri: Osmaniye İlinde Risk Getiri Tercihlerinin Multinominal Probit Modeliyle İncelenmesi. Muhasebe ve Finansman Dergisi, (70), 129–142. http://doi.org/10.25095/mufad.396684
Dalton, M. A., & Dalton, J. F. (2004). Personal Financial Planning: Theory and Practice. Kaplan Financial.
De Paola, M. (2013). The Determinants of Risk Aversion: The Role of Intergenerational Transmission. German Economic Review, 14(2), 214–234. http://doi.org/10.1111/j.1468-0475.2011.00561.x
Delis, M. D., Kammas, P., & Mylonidis, N. (2015). Trust , Happiness , and Households’ Financial Decisions.
Dohmen, T., Falk, A., Huffman, D., Sunde, U., Schupp, J., & Wagner, G. G. (2011). Individual Risk Attitudes: Measurement, Determinants, and Behavioral Consequences. Journal of the European Economic Association, 9(3), 522–550. http://doi.org/10.1111/j.1542-4774.2011.01015.x
Drichoutis, A. C., & Nayga, R. M. (2013). Eliciting risk and time preferences under induced mood states. Journal of Socio-Economics, 45, 18–27. http://doi.org/10.1016/j.socec.2013.04.008
Droms, W. G. (1987). Investment Asset Allocation for PFP Clients. Journal of Accountancy, 163(4), 114–118.
Embrey, L., & Fox, J. (1997). Gender differences in the investment decision-making process. Journal of Financial Counseling and Planning, 8(2), 33–40.
Faff, R., Hallahan, T., & McKenzie, M. (2009). Nonlinear linkages between financial risk tolerance and demographic characteristics. Applied Economics Letters, 16(13), 1329–1332. http://doi.org/10.1080/13504850701381123
Finke, M. S., & Huston, S. J. (2003). The Brighter Side of Financial Risk: Financial Risk Tolerance and Wealth. Journal of Family and Economic Issues, 24(3), 233–256. http://doi.org/10.1023/A:1025443204681
Finucane, M. L., Alhakami, A., Slovic, P., & Johnson, S. M. (2000). The affect heuristic in judgments of risks and benefits. Journal of Behavioral Decision Making, 13(1), 1–17. http://doi.org/10.1002/(SICI)1099-0771(200001/03)13:1<1::AID-BDM333>3.0.CO;2-S
Fisher, P. J., & Yao, R. (2017). Gender differences in financial risk tolerance. Journal of Economic Psychology, 61, 191–202. http://doi.org/10.1016/j.joep.2017.03.006
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Grable, J., & Joo, S. (2004). Environmental and biopsychosocial factors associated with financial risk tolerance. Journal of Financial Counseling and Planning, 15(1), 73–82.
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Yıl 2020, Cilt: 9 Sayı: 3, 209 - 222, 30.09.2020

Ali Osman Oztop , Ezgi Kuyu

https://doi.org/10.17261/Pressacademia.2020.1297

Öz

Kaynakça

Ackert, L. F., Church, B. K., & Deaves, R. (2003). Emotion and Financial Markets. Economic Review - Federal Reserve Bank of Atlanta, 88(2), 33–41. http://doi.org/10.1017/CBO9781107415324.004
Agarwal, S., Amromin, G., Ben-David, I., Chomsisengphet, S., & Evanoff, D. D. (2015). Financial literacy and financial planning: Evidence from India. Journal of Housing Economics, 27, 4–21. http://doi.org/10.1016/j.jhe.2015.02.003
Alpay, E. E., Yavuz, M., & Kahyaoğlu, M. B. (2015). Gelir Durumunun Risk Algısına Etki Eden Diğer Sosyo-Ekonomikve Demografik Faktörler Üzerindeki Etkisi. Cumhuriyet Üniversitesi İktisadi ve İdari Bilimler Dergisi, 16(1), 205–226.
Anbar, A., & Eker, M. (2009). Bireysel yatırımcıların finansal risk algılamalarını etkileyen demografik ve sosyoekonomik faktörler. ZKU Journal of Social Sciences, 5(9), 129–150.
Aren, S., & Zengin, A. N. (2016). Influence of Financial Literacy and Risk Perception on Choice of Investment. Procedia - Social and Behavioral Sciences, 235(February), 656–663. http://doi.org/10.1016/j.sbspro.2016.11.047
Arı, E.& Yıldız, Z. (2014). Parallel Lines Assumption in Ordinal Logistic Regression and Analysis Approaches, International Interdisciplinary Journal of Scientific Research, Vol. 1, No. 3 pp. 8-23.
Au, K., Chan, F., Wang, D., & Vertinsky, I. (2003). Mood in foreign exchange trading: Cognitive processes and performance. Organizational Behavior and Human Decision Processes, 91(2), 322–338. http://doi.org/10.1016/S0749-5978(02)00510-1
Awais, M., Laber, M. F., Rasheed, N., & Khursheed, A. (2016). Impact of Financial Literacy and Investment Experience on Risk Tolerance and Investment Decisions: Empirical Evidence from Pakistan. International Journal of Economics and Financial Issues, 6(1), 73–79.
Bashir, T., Azam, S. N., Butt, S. A. A., Javed, S. A., & Tanvir, S. A. (2013). Are Behavioral Biases Influenced By Demographic Characteristics & Personality Traits? Evidence From Pakistan. European Scientific Journal, 9(29), 277–293.
Brown, S., & Taylor, K. (2002). Wage Growth , Human Capital and Risk Preference : Evidence from the British Household Panel Survey. Retrieved April 9, 2018, from https://www.le.ac.uk/economics/research/RePEc/lec/leecon/econ02-14.pdf?uol_r=d307e306
Calcagno, R., & Monticone, C. (2015). Financial literacy and the demand for financial advice. Journal of Banking & Finance, 50, 363–380. http://doi.org/10.1016/j.jbankfin.2014.03.013
Ceyhan, G. (2008). Yaşam Biçimlerinin Finansal Risk Toleransına Olan Etkileri Üzerine Bir Uygulama (Basılmamış Yüksek Lisans Tezi). Hacettepe Üniversitesi Sosyal Bilimler Enstitüsü, Ankara.
Chaffai, M., & Medhioub, I. (2014). Behavioral finance: An empirical study of the Tunisian stock market. International Journal of Economics and Financial Issues, 4(3), 527–538.
Chavali, K., & Mohanraj, M. P. (2016). International Journal of Economics and Financial Issues Impact of Demographic Variables and Risk Tolerance on Investment Decisions: An Empirical Analysis. International Journal of Economics and Financial Issues, 6(1), 169–175.
Chen, C. K.&Hughes, J. (2004). Using Ordinal Regression Model to Analyze Student Satisfaction Questionnaires, Association for Institutional Research, Vol. 1, 2004, 1-13.
Cihangir, M., Şak, N., & Bilgin, Ş. (2016). Bireysel Yatırımcı Demografileri: Osmaniye İlinde Risk Getiri Tercihlerinin Multinominal Probit Modeliyle İncelenmesi. Muhasebe ve Finansman Dergisi, (70), 129–142. http://doi.org/10.25095/mufad.396684
Dalton, M. A., & Dalton, J. F. (2004). Personal Financial Planning: Theory and Practice. Kaplan Financial.
De Paola, M. (2013). The Determinants of Risk Aversion: The Role of Intergenerational Transmission. German Economic Review, 14(2), 214–234. http://doi.org/10.1111/j.1468-0475.2011.00561.x
Delis, M. D., Kammas, P., & Mylonidis, N. (2015). Trust , Happiness , and Households’ Financial Decisions.
Dohmen, T., Falk, A., Huffman, D., Sunde, U., Schupp, J., & Wagner, G. G. (2011). Individual Risk Attitudes: Measurement, Determinants, and Behavioral Consequences. Journal of the European Economic Association, 9(3), 522–550. http://doi.org/10.1111/j.1542-4774.2011.01015.x
Drichoutis, A. C., & Nayga, R. M. (2013). Eliciting risk and time preferences under induced mood states. Journal of Socio-Economics, 45, 18–27. http://doi.org/10.1016/j.socec.2013.04.008
Droms, W. G. (1987). Investment Asset Allocation for PFP Clients. Journal of Accountancy, 163(4), 114–118.
Embrey, L., & Fox, J. (1997). Gender differences in the investment decision-making process. Journal of Financial Counseling and Planning, 8(2), 33–40.
Faff, R., Hallahan, T., & McKenzie, M. (2009). Nonlinear linkages between financial risk tolerance and demographic characteristics. Applied Economics Letters, 16(13), 1329–1332. http://doi.org/10.1080/13504850701381123
Finke, M. S., & Huston, S. J. (2003). The Brighter Side of Financial Risk: Financial Risk Tolerance and Wealth. Journal of Family and Economic Issues, 24(3), 233–256. http://doi.org/10.1023/A:1025443204681
Finucane, M. L., Alhakami, A., Slovic, P., & Johnson, S. M. (2000). The affect heuristic in judgments of risks and benefits. Journal of Behavioral Decision Making, 13(1), 1–17. http://doi.org/10.1002/(SICI)1099-0771(200001/03)13:1<1::AID-BDM333>3.0.CO;2-S
Fisher, P. J., & Yao, R. (2017). Gender differences in financial risk tolerance. Journal of Economic Psychology, 61, 191–202. http://doi.org/10.1016/j.joep.2017.03.006
Fox, J. (2005). Logistic regression. Maximum-Likelihood Estimation and Generalized Models, York Summer Programme in Data Analysis.
Gibson, R., Michayluk, D., & Van de Venter, G. (2013). Financial risk tolerance: An analysis of unexplored factors. Financial Services Review, 22(1), 23–50.
Grable, J. E. (2000). Financial risk tolerance and additional factors that affect risk taking in everyday money matters. Journal of Business and Psychology, 14(4), 625–630. http://doi.org/10.1023/A:1022994314982
Grable, J. E., & Lytton, R. H. (1998). Investor Risk Tolerance: Testing the Efficacy of Demographics as Differentiating and Classifying Factors. Financial Counseling and Planning, 9(1), 61–73.
Grable, J. E., & Roszkowski, M. J. (2008). The influence of mood on the willingness to take financial risks. Journal of Risk Research, 11(7), 905–923. http://doi.org/10.1080/13669870802090390
Grable, J., & Joo, S. (2004). Environmental and biopsychosocial factors associated with financial risk tolerance. Journal of Financial Counseling and Planning, 15(1), 73–82.
Grable, J., & Lytton, R. (1999). Financial risk tolerance revisited: the development of a risk assessment instrument. Financial services review, 8(3), 163-181.
Grable J.E. (2016) Financial Risk Tolerance. In: Xiao J. (eds) Handbook of Consumer Finance Research. Springer, Cham. https://doi.org/10.1007/978-3-319-28887-1_2
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Toplam 86 adet kaynakça vardır.

Ayrıntılar

Birincil Dil	İngilizce
Konular	Finans, İşletme
Bölüm	Articles
Yazarlar	Ali Osman Oztop 0000-0002-7568-5927 Ezgi Kuyu Bu kişi benim 0000-0001-7737-6389
Yayımlanma Tarihi	30 Eylül 2020
Yayımlandığı Sayı	Yıl 2020 Cilt: 9 Sayı: 3

Kaynak Göster

APA	Oztop, A. O., & Kuyu, E. (2020). INFLUENCE OF SOCIO-DEMOGRAPHIC CHARACTERISTICS, FINANCIAL LITERACY AND MOOD ON FINANCIAL RISK TOLERANCE. Journal of Business Economics and Finance, 9(3), 209-222. https://doi.org/10.17261/Pressacademia.2020.1297

Makale Dosyaları

Tam Metin

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