The effect of demographics and personality on investment choice among Essay

The effect of demographics and personality on investment choice among UK investors - Essay interpreterMany studies have been undertaken across the world by scholars as well as academicians in the field of behavioral finance to explore what all mental and demographic factors affect personal investment decisions and choice among alternatives. The shoot entitled Risk Taking and Problem Context in the Domain of Losses An pass judgment Utility Analysis by John C. Hershey and Schoemaker in 1980 observes that women investors be more try averse than men as regards gamble is concerned (Hershey 1980). Another commonplace study on the gender practices of investing the researchers remark that both men and women are equally successful in investment decisions and there found no significance difference in investment decisions in the midst of male and female groups (Hudgen 1985). In an empirical study among men and women investors in auctions and lotteries undertaken by W. V Harlow and Keith chocolate-brown document that men prefer to take more risk than women as regards lottery and auction investments are concerned (Harlow 1990). In another significant study on investment behaviour among individual investors considering their income level William Riley and K Victor Chow attempt to remark that relative risk aversion decreases as peerless rises above the poverty level and decreases significantly for the very wealthy. It also decreases with develop-but only up to a point. After age 65 (retirement), risk aversion increases with age (Riley 1992). However, the authors speculate that education, income and wealth are all highly correlated, so the relationship may be a function of wealth rather than education (Riley 1992). In a research paper entitled Gender Differences in Risk Behavior in Financial-Decision-Making An Experimental Analysis, it is found that regardless of familiarity and framing, costs or ambiguity, women prefer investments with lower risk than moderate and high risk investments avenues (Powell 1997) . The main contention of the study of N. Jianakoplos and Bernasek in 1998 is that women are likely to exhibit more risk aversion characteristics than men when it comes to investment in defined contribution pension assets (Jianakoplos 1998). In the paper Gender Differences in Risk Taking A Meta-analysis, the authors adjudicate that women would like to take less risk than men (Brynes 1999). Schooley Diane K and Debra Drecnik Worden in their study in 2003 document that educated investors, especially those having education higher than subsidiary level tend to part their hard earned money in risky portfolios (Schooley 2003). The paper also finds that age and proportion of equity holding are positively correlated. In an interesting and popular study entitled Risk Aversion and Personality Type by G. Filbeck, Hatfield P. and Horvath P. in 2005, the authors conclude that the relation between personality type and individual ex ante EUT risk tolera nce is non-linear in form (Filbeck 2005). Reviewing the aforementioned studies and papers, the present study attempts to explore the effect of demographic and personality traits on individual investment decision