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A Cross-Cultural Comparison of Three Risk Tolerance Measures: Turkey and the United States Case

Author

Listed:
  • Jorge Ruiz-Menjivar

    (University of Georgia, Department of Financial Planning, Housing, and Consumer Economics, Athens, Georgia, United States)

  • Amanda Blanco

    (University of Florida, Department of Family, Youth and Community Sciences, Gainesville, Florida, United States)

  • Zeynep Copur

    (Hacettepe University, Department of Family and Consumer Sciences, Ankara, Turkey)

  • Michael S. Gutter

    (University of Florida, Department of Family, Youth and Community Sciences, Gainesville, Florida, United States)

  • Martie Gillen

    (University of Florida, Department of Family, Youth and Community Sciences, Gainesville, Florida, United States)

Abstract

An individual’s attitude toward financial risk tolerance (FRT) is an important preference that influences financial decision-making under uncertainty. FRT involves inter-temporal resource allocation. Accurate and reliable measures of FRT are essential for professionals advising consumers as well as researchers who are trying to predict, and understand consumer behavior. This study explores cross-cultural risk tolerance by comparing random samples from Turkey, and the United States. Similar and distinctive attitudes, and patterns regarding FRT are identified. Three subjective measures of FRT are employed in this study: Grable and Lytton (1999), Hanna, Gutter and Fan’s (2001) improved version of Barsky, Juster, Kimball and Shapiro (1997), and the Survey of Consumer Finance’s item on risk tolerance. Data was collected via an online survey that used the above-mentioned FRT measures. There were two versions: the original American English version, and a culturally translated Turkish version. To explore the correlation of FRT among measures, we use bivariate analysis by individually employing Pearson Chi-square test of independence, and cross tabulations analysis to each sample. In addition, by pooling both samples, we conduct cumulative logistic regression. We delineate FRT differences and consistencies between countries across subjective financial risk tolerance measures.

Suggested Citation

  • Jorge Ruiz-Menjivar & Amanda Blanco & Zeynep Copur & Michael S. Gutter & Martie Gillen, 2014. "A Cross-Cultural Comparison of Three Risk Tolerance Measures: Turkey and the United States Case," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 3(1), pages 1-14, January.
    • Handle: RePEc:rbs:ijbrss:v:3:y:2014:i:1:p:1-14
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    Cited by:

    1. Dee Warmath & Pan‐Ju Chen & John Grable & Eun Jin Kwak, 2021. "Soft landings: Extending the cushion hypothesis to financial well‐being in collectivistic cultures," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(4), pages 1563-1590, December.
    2. Abdelkrim Araar & Yesuf Mohammednur Awel & Jonse Bane Boka & Hiywot Menker & Ajebush Shafi & Eleni Abraham Yitbarek & Mulatu Zerihun, 2019. "Entrepreneurs’ Attitudes Toward Risk in Micro and Small Enterprises: Evidence from Urban Ethiopia," Working Papers PMMA 2019-05, PEP-PMMA.

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