| Though people are generally risk averse, individuals vary widely in the degree of financial risk they are willing to incur. I propose that Regulatory Focus Theory (Higgins, 2000, 2002) can help explain financial risk aversion attitudes by relating them to more general promotion- and prevention-oriented personality traits. The present research measured promotion focus and prevention focus traits individually using the Regulatory Focus Questionnaire (RFQ) (Higgins, Friedman, Harlow, Idson, Ayduk, & Taylor, 2001) and compared those traits to financial risk aversion attitudes measured by items selected from the Investment Risk Tolerance Instrument (IRTI) (Corter, 2001) and the Risk Tolerance Questionnaire (RTQ) (Corter & Chen, 2006), as well as new items of similar form and content created by the author. RFQ scores were found to be significantly correlated with financial risk aversion attitudes. Specifically, the prevention focus trait was positively correlated with both loss aversion and uncertainty aversion attitudes. Implications of the relationship between regulatory focus traits and financial risk aversion attitudes are discussed for individuals' investment decision making. |
