IDEAS home Printed from https://ideas.repec.org/a/ids/ijrevm/v9y2016i1p57-71.html
   My bibliography  Save this article

The relationship between personality traits and investment risk preference

Author

Listed:
  • Chung-Chu Liu
  • Kai-Yin Woo
  • Tai-Yuen Hon

Abstract

Personality traits and risk preference behaviours have been the main subjects of behavioural finance. Our present study is to explore the relationship between the personality traits and investment risk preference. Questionnaire survey method is adopted to collect data and 600 valid samples are selected for the study. Also, the respondents come from Taiwan and Hong Kong, which allows us to test whether the differences in location of residence between these two regions can moderate the relationship. Our results show that investors personality traits have a significant relationship with their risk preferences. The evidence may help academics to integrate the role of personality traits into behavioural finance models, assist investors to recognise their risk preferences for making investment decisions, and facilitate finance professionals to design and recommend investment products for customers that match their risk preference characteristics with corresponding personality traits.

Suggested Citation

  • Chung-Chu Liu & Kai-Yin Woo & Tai-Yuen Hon, 2016. "The relationship between personality traits and investment risk preference," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 9(1), pages 57-71.
    • Handle: RePEc:ids:ijrevm:v:9:y:2016:i:1:p:57-71
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=76185
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Highhouse, Scott & Yuce, Payam, 1996. "Perspectives, Perceptions, and Risk-Taking Behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(2), pages 159-167, February.
    2. Shu Li & Chang-Jiang Liu, 2008. "Individual differences in a switch from risk-averse preferences for gains to risk-seeking preferences for losses: can personality variables predict the risk preferences?," Journal of Risk Research, Taylor & Francis Journals, vol. 11(5), pages 673-686, July.
    3. Henry Kaiser, 1974. "An index of factorial simplicity," Psychometrika, Springer;The Psychometric Society, vol. 39(1), pages 31-36, March.
    4. Nigel Nicholson & Emma Soane & Mark Fenton-O'Creevy & Paul Willman, 2005. "Personality and domain-specific risk taking," Journal of Risk Research, Taylor & Francis Journals, vol. 8(2), pages 157-176, March.
    5. Farrell, Andrew M., 2010. "Insufficient discriminant validity: A comment on Bove, Pervan, Beatty, and Shiu (2009)," Journal of Business Research, Elsevier, vol. 63(3), pages 324-327, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Antonín PavlÃ­Ä ek & Aneta BobeniÄ HintoÅ¡ová & FrantiÅ¡ek Sudzina, 2021. "Impact of Personality Traits and Demographic Factors on Risk Attitude," SAGE Open, , vol. 11(4), pages 21582440211, December.
    2. Yogita Singh & Mohd. Adil & S. M. Imamul Haque, 2023. "Personality traits and behaviour biases: the moderating role of risk-tolerance," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(4), pages 3549-3573, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anne Bäro & Felix Toepler & Timo Meynhardt & Vivek K. Velamuri, 2022. "Participating in the sharing economy: The role of individual characteristics," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3715-3735, December.
    2. Chiu, Candy Lim & Ho, Han-Chiang & Yu, Tiancheng & Liu, Yijun & Mo, Yuwen, 2021. "Exploring information technology success of Augmented Reality Retail Applications in retail food chain," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).
    3. Antonín PavlÃ­Ä ek & Aneta BobeniÄ HintoÅ¡ová & FrantiÅ¡ek Sudzina, 2021. "Impact of Personality Traits and Demographic Factors on Risk Attitude," SAGE Open, , vol. 11(4), pages 21582440211, December.
    4. Orth, Ulrich R. & Bourrain, Aurelie, 2008. "The influence of nostalgic memories on consumer exploratory tendencies: Echoes from scents past," Journal of Retailing and Consumer Services, Elsevier, vol. 15(4), pages 277-287.
    5. Lillemo, Shuling Chen, 2014. "Measuring the effect of procrastination and environmental awareness on households' energy-saving behaviours: An empirical approach," Energy Policy, Elsevier, vol. 66(C), pages 249-256.
    6. Simplice A. Asongu, 2014. "Knowledge Economy and Financial Sector Competition in African Countries," African Development Review, African Development Bank, vol. 26(2), pages 333-346, June.
    7. Rodríguez-Fuentes, Carlos Javier & Hernández-López, Montserrat, 1997. "Análisis de diferencias estructurales interregionales determinantes en el impacto de la política monetaria," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 7, pages 141-157, Junio.
    8. Asongu, Simplice & Tchamyou, Vanessa & Asongu, Ndemaze & Tchamyou, Nina, 2018. "The Comparative African Economics of Governance in Fighting Terrorism," MPRA Paper 92346, University Library of Munich, Germany.
    9. Simplice A Asongu, 2013. "Modeling the future of knowledge economy: evidence from SSA and MENA countries," Economics Bulletin, AccessEcon, vol. 33(1), pages 612-624.
    10. Xiangfei Yuan & Haijing Hao & Chenghua Guan & Alex Pentland, 2022. "Which factors affect the performance of technology business incubators in China? An entrepreneurial ecosystem perspective," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-20, January.
    11. Marco R Steenbergen & Tomasz Siczek, 2017. "Better the devil you know? Risk-taking, globalization and populism in Great Britain," European Union Politics, , vol. 18(1), pages 119-136, March.
    12. Orkhan Sariyev & Tim K. Loos & Manfred Zeller & Tulsi Gurung, 2020. "Women in household decision-making and implications for dietary quality in Bhutan," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 8(1), pages 1-20, December.
    13. Romero, Pascual & Botía, Pablo & del Amor, Francisco M. & Gil-Muñoz, Rocío & Flores, Pilar & Navarro, Josefa María, 2019. "Interactive effects of the rootstock and the deficit irrigation technique on wine composition, nutraceutical potential, aromatic profile, and sensory attributes under semiarid and water limiting condi," Agricultural Water Management, Elsevier, vol. 225(C).
    14. Mohd Hizam Hanafiah, & Sheikh Usman Yousaf, & Bushra Usman,, 2017. "The influence of psychological capital on the growth intentions of entrepreneurs: A study on Malaysian SME entrepreneurs," Business and Economic Horizons (BEH), Prague Development Center, vol. 13(5), pages 556-569, December.
    15. Omar Hegazi & Samer Alalalmeh & Ahmad Alfaresi & Soheil Dashtinezhad & Ahmed Bahada & Moyad Shahwan & Ammar Abdulrahman Jairoun & Tesleem K. Babalola & Haya Yasin, 2022. "Development, Validation, and Utilization of a Social Media Use and Mental Health Questionnaire among Middle Eastern and Western Adults: A Pilot Study from the UAE," IJERPH, MDPI, vol. 19(23), pages 1-18, November.
    16. Mudaca, Joao Daniel & Tsuchiya, Toshiyuki & Yamada, Masaaki & Onwona-Agyeman, Siaw, 2015. "Household participation in Payments for Ecosystem Services: A case study from Mozambique," Forest Policy and Economics, Elsevier, vol. 55(C), pages 21-27.
    17. Paul MUKUCHA & Divaries Cosmas JARAVAZA & Forbes MAKUDZA, 2022. "Towards Gender-Based Market Segmentation: The Differential Influence of Gender on Dining Experiences in the University Cafeteria Industry," Management and Economics Review, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 7(2), pages 182-200, June.
    18. Vishal K. Gupta & Suman Niranjan & Banu A. Goktan & John Eriskon, 2016. "Individual entrepreneurial orientation role in shaping reactions to new technologies," International Entrepreneurship and Management Journal, Springer, vol. 12(4), pages 935-961, December.
    19. Wei Tong Chen & Hew Cameron Merrett & Ying-Hua Huang & Theresia Avila Bria & Ying-Hsiu Lin, 2021. "Exploring the Relationship between Safety Climate and Worker Safety Behavior on Building Construction Sites in Taiwan," Sustainability, MDPI, vol. 13(6), pages 1-21, March.
    20. Akhter Ali & N. Ravichandran & D.K. Batra, 2013. "Children’s Choice of Influence Strategies in Family Purchase Decisions and the Impact of Demographics," Vision, , vol. 17(1), pages 27-40, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijrevm:v:9:y:2016:i:1:p:57-71. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=99 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.