Factors Related to Risk Tolerance

Effects of financial and demographic variables on risk tolerance were estimated for households withan employed respondent in the 1992 Survey of Consumer Finances. Logistic regression analysisshowed that female headed households were less likely to be risk tolerant than otherwise similarhouseholds with a male head or a married couple. Differences in risk tolerance by gender/maritalstatus, ethnic group and education could be due to differences in understanding of the nature of risk.