Inequality at the societal level is a significant predictor of risk-taking behaviors. Psychology literature demonstrated a link between income inequality and increased risk taking in the domain of gambling urges and behavior. Income inequality is also related to a range of health and social outcomes involving greater risk, such as sexual promiscuity, substance abuse, and crime. Understanding individual consequences of inequality is important, given its implications for individual decision-making and well-being. In this study, we present empirical investigation of whether personal RD is associated with risk aversion and portfolio riskiness among Korean adults. Using multi-waves data drawn from the National Survey of Tax and Benefit, we estimate a series of regressions linking RD to risk aversion and portfolio riskiness. This study extends previous research by offering empirical evidence on the RD-risk preference link in a nationally representative sample. Examining both preference and family financial portfolio also allows us to offer a broader and more comprehensive picture of how financial risk preference responds to RD.

Accepted Oral Presentation