Gender differences in the context of perceived financial scarcity and its effects on risk behavior

Financial scarcity and one’s income have long been studied in relation to people’s financial risk-taking behaviors. In recent years, however, a more recent concept has been introduced in the field of economic psychology research, perceived financial scarcity, which refers to one’s subjective perception of their own financial standing. Considering its novelty, perceived financial scarcity has not been the subject of much research, and its relation to risky behavior even less so. The purpose of this study was to explore the associations between perceived financial scarcity and two dimensions of risk behavior, risk preference and risk tolerance, as well as observe the potential moderating effect of gender on these relationships. Using a sample of 100 participants recruited through an online platform, the results of our research indicated positive associations between risk preference and risk tolerance, in addition to a significant relationship between perceived financial scarcity and...Show moreFinancial scarcity and one’s income have long been studied in relation to people’s financial risk-taking behaviors. In recent years, however, a more recent concept has been introduced in the field of economic psychology research, perceived financial scarcity, which refers to one’s subjective perception of their own financial standing. Considering its novelty, perceived financial scarcity has not been the subject of much research, and its relation to risky behavior even less so. The purpose of this study was to explore the associations between perceived financial scarcity and two dimensions of risk behavior, risk preference and risk tolerance, as well as observe the potential moderating effect of gender on these relationships. Using a sample of 100 participants recruited through an online platform, the results of our research indicated positive associations between risk preference and risk tolerance, in addition to a significant relationship between perceived financial scarcity and risk tolerance. Interestingly, no gender differences were found when testing risk preferences with perceived financial scarcity, while a significant effect of gender was uncovered for the association between perceived financial scarcity and risk tolerance. The results of the study can hopefully provide more clarity regarding the differences between risk preference and risk tolerance, in addition to providing more information that could break down harmful gender stereotypes.Show less

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Gender differences in the context of perceived financial scarcity and its effects on risk behavior