Measures Of Risk Preference In The Stock Market: 18 Countries And Regions In The World

Risk preference has a critical influence for decision-making. An accurate understanding about risk preference will help us to develop a reasonable plan to reduce the risk. A large number of scholars have a research about it. At the beginning,most scholars assume that people are rational premise and discover it based on the Utility the theoretical, standard as the Expected profit and loss value. Most of the current measure to the individual, collective or single region for the study. And there are a large part of research is to explore the influencing factors of risk preference and focused more on individual characteristics factors including age, gender, income, etc.But there are short of comparative studies with countries or regions in a wide range.This article is intended to 18 countries and regions for the study, based on the stock and bond markets as well as lower interest rates in different markets background,measure the risk preference in the countries and regions, and classified and compared.Then the 65-year-old and older population, the urban population, GDP per capita,institutions of higher education enrollment rate, the total number of unemployed as five main factors of risk preference to analysis and empirical testing.Specific research process is as follows: Firstly, the level of risk preference gap 18 countries and regions is large, the overall level of risk preference in Europe than the level of risk preference in Asia is higher. There was a positive correlation between the risk preference of the countries and GDP per capita, the total number of unemployed,which means when GDP per capita and the total number of unemployed increase, the people in this country prefer to hold the risk assets; There was a negative correlation between the risk preference and the urban population, which means when a country develops to urbanization, the people will hate the risk. The 65-year-old and older population and institutions of higher education enrollment rate are no relationship with the risk preference. In all, the factor the total number of unemployed has the largest impact.