Risk aversion and religion
- 1.7k Downloads
We use a dataset for a demographically representative sample of the Dutch population that contains a revealed preference risk attitude measure, as well as detailed information about participants’ religious background, to study three issues. First, we find strong confirmatory evidence that more religious people, as measured by church membership or attendance, are more risk averse with regard to financial risks. Second, we obtain some evidence that Protestants are more risk averse than Catholics in such tasks. Third, our data suggest that the link between risk aversion and religion is driven by social aspects of church membership, rather than by religious beliefs themselves.
KeywordsRisk aversion Religion Catholicism Protestantism
JEL ClassificationsC91 C93 D81 Z12
Stefan Trautmann and Gijs van de Kuilen’s research was supported by VENI grants from the Netherlands Organization for Scientific Research (NWO). In this paper use is made of data of the LISS (Longitudinal Internet Studies for the Social Sciences) panel administered by CentERdata (Tilburg University, The Netherlands).
- Benjamin, D.J.,Choi, J.J., & Fisher, G. (2010). Religious identity and economic behavior. Cambridge: NBER.Google Scholar
- Dekker, G., de Hart, J., & Peters, J. (1997). God in Nederland (2nd ed.). Amsterdam: Anthos.Google Scholar
- Filistrucchi, L., & Prüfer, J. (2013). A governance-based model of nonprofits: catholic and protestant hospitals in Germany. Tilburg: TILEC.Google Scholar
- Iannaccone, L. R. (1998). Introduction to the economics of religion. Journal of Economic Literature, 36, 1465–1496.Google Scholar
- Noussair, C. N., Trautmann, S. T., & van de Kuilen, G. (2013). Higher order risk attitudes, demographics, and financial decisions. Review of Economic Studies, forthcoming.Google Scholar
- Renneboog, L., & Spaenjers, C. (2012). Religion, economic attitudes and household finance. Oxford Economic Papers, 64, 103–127.Google Scholar
- Shu, T., Sulaeman, J., & Yeung, P.E. (2010). Mutual fund risk-taking and local religious beliefs. Georgia: Terry College of Business.Google Scholar
- von Gaudecker, H.-M., van Soest, A., & Wengstrom, E. (2011). Heterogeneity in risky choice behaviour in a broad population. American Economic Review, 101, 664–694.Google Scholar