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The Effects Of Emotions On Risk Aversion Behavior

Author

Listed:
  • Selim AREN

    (Yildiz Technical University)

  • A. Berrak KÖTEN

    (Istanbul Kultur University)

Abstract

This study investigates the effects of basic emotions like fear, sadness, anger, and hope on risk aversion and the intent to make a risky investment. The data used in the study in 2017 were obtained through convenience sampling. A relationship was found between fear and risk aversion and between risk aversion and the intent to make a risky investment. Both objective and subjective financial literacy affect the relationship between fear and risk aversion, while the latter significantly affects sadness. The study makes an important contribution to the literature on the effects of basic emotions on risky investment intent.

Suggested Citation

  • Selim AREN & A. Berrak KÖTEN, 2019. "The Effects Of Emotions On Risk Aversion Behavior," JOURNAL OF LIFE ECONOMICS, Holistence Publications, vol. 6(4), pages 421-436, October.
    • Handle: RePEc:jle:journl:v:6:y:2019:i:4:p:421-436
    DOI: 10.15637/jlecon.6.026
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    Citations

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    Cited by:

    1. Aren Selim & Hamamci Hatice Nayman, 2023. "Mediating Effect of Pleasure-Seeking and Loss Aversion in the Relationship Between Phantasy and Financial Risk Tolerance and the Moderating Role of Confidence," Folia Oeconomica Stetinensia, Sciendo, vol. 23(2), pages 24-44, December.
    2. Eric Tham, 2023. "Sentiment or habits: Why not both?," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 46(1), pages 203-215, February.

    More about this item

    Keywords

    Risk aversion; risky investment intention; fear; hope; sadness; anger;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

    Statistics

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