IDEAS home Printed from https://ideas.repec.org/a/rba/rbabul/jun2012-04.html
   My bibliography  Save this article

Households' Appetite for Financial Risk

Author

Listed:
  • Susan Black

    (Reserve Bank of Australia)

  • Lamorna Rogers

    (Reserve Bank of Australia)

  • Albina Soultanaeva

    (Reserve Bank of Australia)

Abstract

Australian households’ appetite for risk appears to have declined in recent years with households having actively shifted their portfolios away from riskier financial assets. The change in the composition of financial assets has been seen across most age and income groups. The shift in households’ actual risk exposures also accords with changes in self-reported preferences for risk.

Suggested Citation

  • Susan Black & Lamorna Rogers & Albina Soultanaeva, 2012. "Households' Appetite for Financial Risk," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 37-42, June.
    • Handle: RePEc:rba:rbabul:jun2012-04
    as

    Download full text from publisher

    File URL: https://www.rba.gov.au/publications/bulletin/2012/jun/pdf/bu-0612-4.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mehra, Rajnish & Prescott, Edward C., 1985. "The equity premium: A puzzle," Journal of Monetary Economics, Elsevier, vol. 15(2), pages 145-161, March.
    2. Finlay Richard & Price Fiona, 2015. "Household saving in Australia," The B.E. Journal of Macroeconomics, De Gruyter, vol. 15(2), pages 677-704, July.
    3. Cardak, Buly A. & Wilkins, Roger, 2009. "The determinants of household risky asset holdings: Australian evidence on background risk and other factors," Journal of Banking & Finance, Elsevier, vol. 33(5), pages 850-860, May.
    4. Veld-Merkoulova, Yulia V., 2011. "Investment horizon and portfolio choice of private investors," International Review of Financial Analysis, Elsevier, vol. 20(2), pages 68-75, April.
    5. Alexander, Gordon J. & Baptista, Alexandre M., 2010. "Active portfolio management with benchmarking: A frontier based on alpha," Journal of Banking & Finance, Elsevier, vol. 34(9), pages 2185-2197, September.
    6. Cohn, Richard A, et al, 1975. "Individual Investor Risk Aversion and Investment Portfolio Composition," Journal of Finance, American Finance Association, vol. 30(2), pages 605-620, May.
    7. Jessica A. Wachter & Motohiro Yogo, 2010. "Why Do Household Portfolio Shares Rise in Wealth?," The Review of Financial Studies, Society for Financial Studies, vol. 23(11), pages 3929-3965, November.
    8. Richard Finlay, 2012. "The Distribution of Household Wealth in Australia: Evidence from the 2010 HILDA Survey," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 19-27, 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. Kesavayuth, Dusanee & Ko, Kaung Myat & Zikos, Vasileios, 2018. "Locus of control and financial risk attitudes," Economic Modelling, Elsevier, vol. 72(C), pages 122-131.

    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. Alexandra Spicer & Olena Stavrunova & Susan Thorp, 2016. "How Portfolios Evolve after Retirement: Evidence from Australia," The Economic Record, The Economic Society of Australia, vol. 92(297), pages 241-267, June.
    2. Guiso, Luigi & Sodini, Paolo, 2013. "Household Finance: An Emerging Field," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, volume 2, chapter 0, pages 1397-1532, Elsevier.
    3. Sofia Vale & Francisco Camões, 2017. "Housing valuation, wealth perception, and households’ portfolio composition," EcoMod2017 10565, EcoMod.
    4. Qize Li & Dirk Brounen & Jianjun Li & Xu Wei, 2022. "The Effect of Housing Wealth on Household Portfolio Choice," Annals of Economics and Finance, Society for AEF, vol. 23(2), pages 253-277, November.
    5. Becker, Gideon, 2014. "The portfolio structure of German households: A multinomial fractional response approach with unobserved heterogeneity," University of Tübingen Working Papers in Business and Economics 74, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    6. Huirong Liu, 2020. "Housing Investment, Stock Market Participation and Household Portfolio choice: Evidence from China's Urban Areas," Papers 2001.01641, arXiv.org.
    7. Jakusch, Sven Thorsten, 2017. "On the applicability of maximum likelihood methods: From experimental to financial data," SAFE Working Paper Series 148, Leibniz Institute for Financial Research SAFE, revised 2017.
    8. Lu, Xiaomeng & Guo, Jiaojiao & Gan, Li, 2020. "International comparison of household asset allocation: Micro-evidence from cross-country comparisons," Emerging Markets Review, Elsevier, vol. 43(C).
    9. Alessandro Bucciol & Raffaele Miniaci, 2011. "Household Portfolios and Implicit Risk Preference," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1235-1250, November.
    10. Wei, Shang-Jin & Wu, Weixing & Zhang, Linwan, 2019. "Portfolio choices, Asset returns and wealth inequality: evidence from China," Emerging Markets Review, Elsevier, vol. 38(C), pages 423-437.
    11. Bekhtiar, Karim & Fessler, Pirmin & Lindner, Peter, 2019. "Risky assets in Europe and the US: risk vulnerability, risk aversion and economic environment," Working Paper Series 2270, European Central Bank.
    12. Francisco Camões & Sofia Vale, 2018. "Housing Valuation, Wealth Perception, and Homeowners’ Portfolio Composition," Journal of Family and Economic Issues, Springer, vol. 39(3), pages 494-508, September.
    13. Veld-Merkoulova, Yulia V., 2011. "Investment horizon and portfolio choice of private investors," International Review of Financial Analysis, Elsevier, vol. 20(2), pages 68-75, April.
    14. Xiong, Qizhou, 2015. "Censored Fractional Response Model: Estimating Heterogeneous Relative Risk Aversion of European Households," IWH Discussion Papers 11/2015, Halle Institute for Economic Research (IWH).
    15. Kaustia, Markku & Conlin, Andrew & Luotonen, Niilo, 2023. "What drives stock market participation? The role of institutional, traditional, and behavioral factors," Journal of Banking & Finance, Elsevier, vol. 148(C).
    16. Zou, Jing & Deng, Xiaojun, 2019. "Financial literacy, housing value and household financial market participation: Evidence from urban China," China Economic Review, Elsevier, vol. 55(C), pages 52-66.
    17. Stamatios Tsigos & Kevin Daly, 2016. "“Fair go” for all? Wealth and Risk Aversion of Australian Households," Australian Economic Papers, Wiley Blackwell, vol. 55(3), pages 274-300, September.
    18. Claudio Campanale, 2011. "Learning, Ambiguity and Life-Cycle Portfolio Allocation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(2), pages 339-367, April.
    19. Luc Arrondel & Fr餩rique Savignac, 2015. "Risk management, housing and stockholding," Applied Economics, Taylor & Francis Journals, vol. 47(39), pages 4208-4227, August.
    20. Jiandong Li & Jianmei Zhao, 2019. "How Housing Affects Stock Investment—An SEM Analysis," Economies, MDPI, vol. 7(1), pages 1-11, 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:rba:rbabul:jun2012-04. 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: Paula Drew (email available below). General contact details of provider: https://edirc.repec.org/data/rbagvau.html .

    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.