Age, Gender and Dispositional Greed as Psycho-social Correlates of Financial Risk Tolerance

This study was aimed at understanding how psycho-social factors predict financial risk tolerance. The study adopted a cross-sectional design and a convenience sampling technique on a sample of Nigerian undergraduates drawn from the Department of Psychology of the University of Lagos. Participants were administered questionnaire containing demographic questions such as age and gender; Dispositional Greed Scale (DGS) for evaluation of greedy behaviour and the Grable-Lytton Risk Tolerance Scale (GL-RTS) for financial risk tolerance assessment. First, we explored how age is related to financial risk tolerance. Second, we analyzed the gender difference in financial risk taking and finally, we analyzed how dispositional greed is associated with financial risk tolerance. Results showed no significant relationship between age and financial risk taking (p >.05), no gender difference in financial risk tolerance (p >.05) and no significant relationship between dispositional greed and financial risk tolerance (p >.05). Additionally, the interaction effect of age and gender failed to predict financial risk tolerance (p >.05). The results suggest that understanding financial risk tolerance is a complex process that goes beyond the exclusive use of psycho-social factors such as age, gender and dispositional greed; thus, these factors should be used with caution by financial planners when assessing investors? risk tolerance.