Impact of Socio Economic, Demographic and Psychological Factors on Risk Taking Behavior: A Case Study of Punjab
DOI:
https://doi.org/10.61506/01.00451Keywords:
Decision making, Demographic, Psychological, Punjab, Risk taking behavior, SocioeconomicAbstract
Recent studies have suggested that socioeconomic, psychological and demographic factors play an important role for risk taking behavior. These suggestions raise the question that whether all of these variables have positive or negative impact on risk taking behavior. So, this study aims to estimate the impact of these factors on risk taking behavior. Primary data is collected from 642 households of three cities in Punjab as these three cities are representative of Punjab, Pakistan. During economic decision-making, risk-taking behavior is affected by many variables. The results show that variables like Age, head of family, education level, committee system, trust and optimism have significant negative effect on risk taking behavior of households. While influence of others, financial literacy, and impulsivity, location, and stress have significant positive impact on risk taking behavior. Other variables such as gender, marital status, family system, and do not have significant effects on risk taking behavior. The results of this study may help in devising economic and social policies for the improvement of economic decision making. This study would pave ways for the policy makers as how to create strategies to grow economies by thinking and taking microeconomic factors into account like risk taking behavior.
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