Personal Attributes and Financial Risk-Taking in Australia

Abstract

Using a bootstrapped sample of respondents from the Household Income and Labour Dynamics in Australia (HILDA) survey, we employ canonical correlation analysis to examine the relationships between financial risk-taking (as measured by self-reported financial risk-taking attitude, direct share ownership, and business ownership) and age, gender, education, household structure, income and wealth. Though all three measures are good indicators of financial risk-taking, we find direct share ownership is influential as a whole, followed by self-reported risk-taking, and finally business ownership. Of the personal attributes identifying financial risk-taking, the most important positive correlates are wealth, followed at some distance by income and then education.