Geographical variations in risk tolerance and the use of financial instruments: evidence from a multi-jurisdictional survey

Abstract:

A substantial body of literature examines the determinants of risk preferences and their impact on risk-taking. However, few studies offer a nuanced understanding of behaviour situated in a cultural and geographical context. Using data from a representative sample survey of working individuals in 11 jurisdictions, this paper addresses this gap by exploring how context influences individual-level determinants of risk preferences. The findings reveal that, despite commonalities, context significantly affects how individual characteristics shape risk preferences and behaviour. Incorporating institutional and cultural factors into our understanding of human decision-making provides a more accurate representation of the geographical diversity of individual behaviour when faced with similar issues.