Tell me what you study, and I’ll tell you what your risk profile is : evidence on financial, career and educational risk domains

• Author(s): Jacinto, Madalena Costa Ferreira Lavrador
• Date: 2014
• Persistent ID: http://hdl.handle.net/10400.14/15643
• Origin: Veritati - Repositório Institucional da Universidade Católica Portuguesa
• Subject(s): Risk aversion; Financial literacy; Risk domains; Domínio/Área Científica::Ciências Sociais::Economia e Gestão
• Document Type: Master thesis
• Language: English
• Advisor(s): Raposo, Pedro
• Contributor(s): Veritati - Repositório Institucional da Universidade Católica Portuguesa

Description

The aim of this dissertation is to study the association between studying in business schools and students’ risk profiles, especially in the financial, career and educational risk domains. Based on Ding, Hartog and Sun’s (2010) survey to measure risk attitudes and using a sample divided into (i) people that study or have studied business or economics in the university (treated group) and (ii) those who have not studied business or economics, but that had considered taking a business or economics university degree (control group), I present results regarding financial literacy and its role in determining financial risk among business students. In addition to that, I also present results regarding career and educational risk and argue these are influenced by a business school organizational culture and competitiveness. I show that people who attend or have attended a business school are more likely to be more risk averse and more risk loving, i.e. less likely to be risk neutral, than non business students in the career domain, at a significance level of 1% and 10%, respectively. Moreover, I show that business and economics students are less likely to be risk averse in the financial domain at a 10% significance level. Finally, when introducing financial literacy as a moderator in the analysis, I demonstrate that a person that has both studied in a business school and has a high literacy level is more likely to be both risk averse or risk loving than a person that has not studied in a business school and/or has low literacy level, at a significance level of 1%. These results have several policy implications with regards to the functioning of financ ial markets, as well as to entrepreneurship and its importance to economic growth.