Research on financial risk tolerance and risk-taking increasingly incorporates personality traits into predictive and descriptive models of risk-taking behavior; however, intercorrelations among traits can obscure the unique contributions of individual traits. This is known as the suppressor effect. This study employed a two-stage analytic framework to test and adjust for suppressor effects across the Big Five personality dimensions in describing financial risk tolerance. In Stage 1, correlation and OLS regression analyses identified suppression patterns, revealing that the explanatory validity of some factors was distorted by shared variance. In Stage 2, suppression-adjusted trait estimates were used to reassess their unique association with financial risk-taking mediated through financial risk tolerance. Results indicate that Openness to Experience and Extraversion are the strongest descriptors of financial risk-taking once suppressor effects are controlled. At the same time, Agreeableness and Conscientiousness contribute modestly and context-dependently to descriptions of financial risk-taking. These findings demonstrate that ignoring suppression effects can lead to mischaracterizing the role of personality in financial decision-making. This study shows that more precise estimates of trait influences can improve theoretical models of investor behavior and enhance the delivery of financial advice and education.

The objective of this study was to estimate the association between household income and tobacco and alcohol use and to measure the mediation effect risk tolerance - as measured across seven domains (driving, financial matters, occupational, health, faith in people, romantic relationships and major life change) - in describing tobacco and alcohol use. Findings from this study, based on data from the 2012 National Longitudinal Survey of Youth, provide insights into the relationship between health-related risk-taking behaviors and socioeconomic household-level outcomes. Regression and mediation tests showed that risk tolerance plays a significant role in describing smoking and drinking behaviors. A key finding from the study suggests that risk tolerance mediates (and sometimes suppresses) the income effect on smoking and drinking behaviors. Results from this study provide information that researchers, educators and policymakers can use to better understand the association between health behavior and socioeconomic status when attempting to combat chronic disease.

This study examines the intersection of race, gender, and financial risk tolerance in relation to wealth accumulation, with a particular focus on Black women in the United States. Addressing a notable gap in the literature, this research examines the association between racial identity and gender role attitudes, and whether risk tolerance is linked to wealth-building trajectories. It is hypothesized that reduced risk tolerance — frequently cited as a barrier to wealth accumulation — may disproportionately impede Black women’s financial advancement, thereby contributing to the persistent racial wealth gap. Using data from the National Longitudinal Survey of Youth 1979 (NLSY79), we found that gender role attitudes are not strongly associated with risk tolerance or wealth accumulation. We did find — consistent with human capital theory — that wealth and education are positively associated with higher levels of risk tolerance. However, structural disparities in wealth and educational attainment among Black women diminish the wealth-enhancing effects typically associated with risk tolerance. The analysis highlights a reinforcing cycle across wealth, education, and risk attitudes that serve to deepen racialized economic inequality. Policy implications from this study center on the need to address structural deficits in wealth and education, as well as to promote financial risk literacy. Enhancing the understanding of risk-return trade-offs may offer a viable pathway toward narrowing the wealth gap experienced by Black women and improving their long-term financial security.

This study aimed to identify predisposing endogenous and exogenous, and precipitating, financial decision-maker characteristics associated with categories of financial confidence and creditworthiness. Findings revealed that individuals who believe their country is headed in the right direction were more likely to report high financial confidence and high creditworthiness. Similarly, possessing an internal locus of control significantly increased the likelihood of falling into this high-functioning category. Conversely, several factors were found to increase the possibility of suboptimal profiles (i.e., cases in which financial confidence and creditworthiness were misaligned). Specifically, individuals experiencing housing or food insecurity, recent financial shocks, or belonging to specific racial or ethnic groups (e.g., Hispanic/Latino, Asian, or Black/African American), as well as older adults, were more likely to report either low confidence and high creditworthiness or low confidence and low creditworthiness. The findings suggest that structural and psychological factors are jointly associated with financial self-perceptions and objective financial standing. Potential policy interventions, based on this research, include moving beyond narrow economic metrics to consider the psychological dimensions of financial decision-making. Mandating high-quality, developmentally appropriate financial education may help bolster actual and perceived financial capability across the population. Furthermore, the training of financial professionals could be modified to explicitly incorporate behavioral and cultural competencies, enabling them to better identify and address discrepancies between their clients' confidence and credit realities. This approach is particularly critical for serving populations that face systemic barriers and whose financial narratives may not align with conventional indicators of creditworthiness.