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Cultural Influences on Risk Tolerance: Evidence for Students in Indonesia

Author

Listed:
  • Sudarso Kaderi Wiryono

    (Institut Teknologi Bandung, Indonesia)

  • Mandra Lazuardi Kitri

    (Institut Teknologi Bandung, Indonesia)

  • Santi Novani

    (Institut Teknologi Bandung, Indonesia)

  • Prawira Fajarindra Belgiawan

    (Institut Teknologi Bandung, Indonesia)

  • Marla Setiawati

    (Institut Teknologi Bandung, Indonesia)

Abstract

This paper examined the impact of culture on risk tolerance for students in Indonesia. By using surveys that had been completed by 309 college students, this research used logistic regression as the main method. This research found that there is no evidence that Western Indonesia would score as more risk-tolerant on standard risk assessment questionnaire and would choose portfolio allocations that are riskier than Central & Eastern Indonesia. Parents' higher education has given a significant result to the risk tolerance match. The theoretical and practical implications of this research are discussed. Our findings suggest that differences in risk tolerance are at least partially a product of a culture which is a tribe in each region, but such differences may not always be reflected in actual investment decisions.

Suggested Citation

  • Sudarso Kaderi Wiryono & Mandra Lazuardi Kitri & Santi Novani & Prawira Fajarindra Belgiawan & Marla Setiawati, 2020. "Cultural Influences on Risk Tolerance: Evidence for Students in Indonesia," International Review of Management and Marketing, Econjournals, vol. 10(5), pages 1-4.
    • Handle: RePEc:eco:journ3:2020-05-1
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    References listed on IDEAS

    as
    1. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2006. "Does Culture Affect Economic Outcomes?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 23-48, Spring.
    2. Pyles, Mark K. & Li, Yongping & Wu, Shifang & Dolvin, Steven D., 2016. "Cultural influences on risk tolerance and portfolio creation," Journal of Behavioral and Experimental Finance, Elsevier, vol. 9(C), pages 43-55.
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    More about this item

    Keywords

    Risk tolerance; cultural influences; tribe;
    All these keywords.

    JEL classification:

    • I0 - Health, Education, and Welfare - - General
    • Z0 - Other Special Topics - - General

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