©1996, Association for Financial Counseling and Planning Education 11 Factors Related To Risk Tolerance

Effects of financial and demographic variables on risk tolerance were estimated for households with an employed respondent in the 1992 Survey of Consumer Finances. Logistic regression analysis showed that female headed households were less likely to be risk tolerant than otherwise similar households with a male head or a married couple. Differences in risk tolerance by gender/marital status, ethnic group and education could be due to differences in understanding of the nature of risk. KEY WORDS: risk tolerance, individual investors, Survey of Consumer Finance