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Risk Tolerance

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Handbook of Consumer Finance Research

Abstract

This chapter provides an overview of the important role financial risk tolerance plays in shaping consumer financial decisions. A review of normative and descriptive models of risk tolerance is provided. Additional discussion regarding the measurement of risk tolerance is also presented. The chapter includes the presentation of a conceptual model of the principal factors affecting financial risk tolerance with recommendations designed to enhance the consumer finance field’s knowledge of risk tolerance. The chapter concludes with a summary of additional research needed to better understand the multidimensional nature of risk tolerance.

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Author information

Authors and Affiliations

  1. Institute of Personal Financial Planning, School of Family Studies and Human Services, Kansas State University, Manhattan, KS 66506, USA

    John E. Grable

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  1. John E. Grable
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Editor information

Editors and Affiliations

  1. University of Rhode Island Transition Center, 2 Lower College Rd., Kingston, RI 02881, USA

    Jing Jian Xiao Ph.D.

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Grable, J.E. (2008). Risk Tolerance. In: Xiao, J.J. (eds) Handbook of Consumer Finance Research. Springer, New York, NY. https://doi.org/10.1007/978-0-387-75734-6_1

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