Risk-Averse by Nation or by Religion? Some Insights on the Determinants of Individual Risk Attitudes

摘要

Research findings have proven that the willingness to take risks is distributed heterogeneously among individuals. In the general public, there is a widely held notion that individuals of certain nationalities tend to hold certain typical risk preferences. Furthermore, religious beliefs are thought to explain differences in risk-preparedness on the individual level. We analyze these two possible determinants of individual risk attitudes: nationality and religion. First addressing the study of risk attitudes in a literature review, we then test our hypotheses empirically using the large, representative German Socio-Economic Panel (SOEP). To understand the importance of nationality, we focus on emigrants to Germany. The key findings are: (1) Nationality is not a valid determinant of risk attitudes. It can be broken down into several constituent factors including religion. (2) Religiousness is a significant determinant of risk attitudes. Religious persons are less risk-tolerant than atheists. Moreover, religious affiliation matters: Muslims are less risk-tolerant than Christians.