Social Network and Financial Risk Tolerance Among Investors Nearing and During Retirement

Ela Ostrovsky-Berman*, Howard Litwin

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

14 Scopus citations

Abstract

This study examined the relationship between social networks and one’s tendency to invest in risky assets. We used cross-sectional data from the Survey of Health, Aging and Retirement in Europe (SHARE), including a measure of financial risk preference and detailed information on respondents’ most meaningful social ties. We found that social network is a relevant predictor of the willingness to invest in risky assets. The size of the social network positively correlates with stock ownership, and the components of the network play an important role in investment decisions. Moreover, the propensity to invest in stocks is positively associated with the proportion of the network that is comprised of spouse and friends. However, it is negatively associated with the proportion of the network that is comprised by one’s children.

Original languageEnglish
Pages (from-to)237-249
Number of pages13
JournalJournal of Family and Economic Issues
Volume40
Issue number2
DOIs
StatePublished - 15 Jun 2019

Bibliographical note

Publisher Copyright:
© 2018, Springer Science+Business Media, LLC, part of Springer Nature.

Keywords

  • Portfolio choices
  • Risk tolerance
  • SHARE
  • Social network
  • Stockholding

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