Investment Risk Perceptions: Understanding Middle-Class African-Americans
This research examines the differences in investment behavior between middle-class African Americans and Caucasian Americans. Previous studies have used income as the main variable to explain the difference in investment behavior between the two groups. This research supplements prior findings by investigating the impact of risk perceptions and investment knowledge on willingness to invest in stocks and bonds. The methods of the study include a review of literature and a survey of middle-class African and Caucasian Americans. The study tests the prediction that, increased net worth and knowledge about investment options are associated with an increased risk tolerance and more aggressive investment behaviors. The survey assesses the knowledge of investment markets, risk preference and risk tolerance between the two ethnicities. Under similar risk orientations, African-Americans tend to exhibit behavior similar to Caucasian Americans. The results of this study have significant implications for better understanding the variance between the two ethnicities' investment behaviors.
School:
Southwest Texas State University
Department:
Finance
Research Advisor:
Tiffany Barnett White
Department of Research Advisor:
Marketing
Year of Publication:
2002