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John Grable

The University of Georgia, Financial Planning, Housing and Consumer Economics, Faculty Member

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Professor John Grable teaches and conducts research in the Certified Financial Planner Board of Standards Inc. undergraduate and graduate programs at the University of Georgia where he holds an Athletic Association Endowed Professorship. Prior to entering the academic profession, he worked as a pension/benefits administrator and later as a Registered Investment Advisor in an asset management firm. Dr. Grable served as the founding editor for the Journal of Personal Finance and co-founding editor of the Journal of Financial Therapy. He is currently co-editor of Financial Planning Review. He is best known for his work in the areas of financial risk-tolerance assessment, behavioral financial planning, and evidence-based financial planning. He has been the recipient of several research and publication awards and grants, and is active in promoting the link between research and financial planning practice where he has published over 100 refereed papers, co-authored three financial planning textbooks, co-authored a financial planning communication book, and co-edited a financial planning and counseling scales book. Dr. Grable is active in the Financial Planning Association and the Financial Therapy Association. He also writes a quarterly column for the Journal of Financial Service Professionals. More information about his work can be found at: www.fpplab.org.
Phone: 7065424758
Address: 205 Dawson Hall
University of Georgia
Athens, GA 30677
United States of America

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Papers by John Grable

The Investment Risk Tolerance Assessment: A Resource for Extension Educators

Journal of Extension

This article provides a brief review of investment risk tolerance, clarifications of terms used t... more This article provides a brief review of investment risk tolerance, clarifications of terms used to describe risk attitudes, and a description of an online tool, the Investment Risk Tolerance Assessment (IRTA). The IRTA is a research-based tool that provides a score indicating a personalized analysis of a user's willingness to take financial risk. Extension educators can add value to the lives of their clientele by providing assistance in assessing risk tolerance in a valid and reliable manner. For this reason, the IRTA should be a useful addition to Extension educators' toolboxes.

The Moderating Effect of Financial Knowledge on Financial Risk Tolerance

Journal of Risk and Financial Management

The purpose of this paper is to describe a study that was designed to determine to what extent su... more The purpose of this paper is to describe a study that was designed to determine to what extent subjective and objective measures of financial knowledge moderate the relationship between an investor’s financial risk tolerance and demographic factors thought to be important descriptors of an investor’s willingness to take a financial risk. It was determined that those who identified as male, and those with more attained education and income, exhibited higher investment risk tolerance (IRT). Subjective financial knowledge (SFK) was positively associated with IRT. The relationship between gender and IRT was moderated by SFK, whereas the relationship between IRT and age was moderated by objective financial knowledge (OFK). A positive relationship between education and IRT was noted, but the relationship was moderated by OFK, whereas the association between IRT and household income was moderated by SFK. Findings from this study indicate that while SFK and OFK are positively correlated, th...

Does Miscalibration of Financial Risk Tolerance Describe Portfolio Holdings?

Academia Letters

Does Miscalibration of Financial Risk Tolerance Describe Portfolio Holdings?

Academia Letters, 2022

Does Miscalibration of Financial Risk Tolerance Describe Portfolio Holdings?

Academia Letters, 2022

An Assessment of the Association between Political Orientation and Financial Risk Tolerance

Journal of Risk and Financial Management

The purpose of this paper is to present findings from research that was undertaken to answer the ... more The purpose of this paper is to present findings from research that was undertaken to answer the following questions. First, to what extent is political orientation associated with financial risk tolerance, and second, to what degree is political orientation predictive of changes in risk tolerance across periods? Using panel collected before and after the 2020 U.S. presidential election, it was determined that the strength of affiliation with the Republican and Democratic Parties was descriptive of cross-sectional financial risk tolerance. Republicans were found to exhibit greater risk tolerance compared with Democrats. Across periods, the risk tolerance of Republicans was less stable, whereas the financial risk tolerance of Democrats was more stable. A significant decrease in risk tolerance was observed for those affiliating as a Republican pre-election to post-election. When political orientation was measured on a scale, the decrease in risk tolerance across periods for Republican...

What Role Does Financial Risk Tolerance Play in Mediating Investing Behavior

The present study offers an alternative explanation for the so-called gender and marital (cohabit... more The present study offers an alternative explanation for the so-called gender and marital (cohabitation) status asset gap. The working hypothesis was that risk tolerance might have a mediation effect on investment behavior. Results show that financial risk tolerance significantly mediated the effects of gender on investment behavior. Similarly, risk tolerance played a small yet significant mediating role between cohabitation status and investment behavior. It is possible that what appears to be a gender or cohabitation status asset gap may be more closely related to differences in financial risk tolerance, regardless of gender or cohabitation status.

Infrastructure, Urbanization, and Demand for Bank and Non-Bank Loans of Households in the People’s Republic of China

Financial inclusion plays an important role in giving households greater access to borrowing oppo... more Financial inclusion plays an important role in giving households greater access to borrowing opportunities, which in turn can be used to improve human capital accumulation, socioeconomic status, and long-run economic development. One way to enhance households’ access to and usage of the financial system, especially the formal banking system, is to ensure that an adequate infrastructure exists within their community. This study uses data from the 2013 Chinese Household Finance Survey to investigate how the infrastructure affects the usage of formal bank loans for both urban and rural households in the People’s Republic of China (PRC). The analysis is extended to investigate the impacts of the infrastructure on non-bank loans. The results suggest that the infrastructure, in a variety of forms (e.g., physical, financial, technological, social, and informational), is significantly associated with the loan demand—most notably for urban households using formal bank loans. Further, those l...

An Evaluation of the Effect of the COVID-19 Pandemic on the Risk Tolerance of Financial Decision Makers

Finance Research Letters, 2021

Baby universes (inflationary or non-inflationary) are regions of spacetime that disconnect from t... more Baby universes (inflationary or non-inflationary) are regions of spacetime that disconnect from the original ambient spacetime, which we take to be asymptotically flat spacetime. A particular kind of baby universe solution, involving string-like matter, is studied to show that it can be formed by "investing" an arbitrarily small amount of energy, i.e. it can appear from an almost flat space at the classical level. Since this possibility has not yet been clearly recognized in the literature, we then discuss in detail its properties, relevance and possible generalizations.

Characteristics of random responders in a financial risk-tolerance questionnaire

The possibility of random response occurring, which can result in Type II errors, is possible whe... more The possibility of random response occurring, which can result in Type II errors, is possible whenever a financial risk-tolerance questionnaire is administered. This study was designed to apply interitem standard deviation (ISD) scores, as introduced by Marjanovic, Holden, Struthers, Cribbie, and Greenglass (2015), to identify responders to a financial risk-tolerance questionnaire as hyperconsistent, conscientious, or random. Hyper-consistent responders were found to be more likely to be older married men who make their own financial and investment decisions. Those classified as hyperconsistent exhibited the lowest risk-tolerance scores. Conscientious responders were more likely to report having a high level of attained education and to rely on someone else when making financial and investment decisions. Financial risk-tolerance scores for conscientious responders fell between scores for hyper-consistent and random responders. Random responders were found to be younger, single, less...

The role of financial literacy in describing the use of professional financial advisors before and during the COVID-19 pandemic

Journal of Financial Services Marketing, 2021

This paper documents the effect of the COVID-19 pandemic on the use of profession financial advis... more This paper documents the effect of the COVID-19 pandemic on the use of profession financial advisors across a broad sample of financial decision makers (N = 16,431). Findings show that financial literacy played a significant role in describing the use of financial advisors in the USA before and during the pandemic. Those who exhibited higher levels of financial literacy were more likely to use the services of professional financial advisors. Based on a series of regression tests, it was determined that the effect of COVID-19 on the use of financial advisors was, to some extent, moderated by financial literacy.

Improving Youth Financial Literacy: A Profile of Middle School Camp Attendees

Journal of Extension, 2021

The purpose of this paper is to present a profile of middle-school-age youth who participated in ... more The purpose of this paper is to present a profile of middle-school-age youth who participated in a week- long experiential residential camp focused on helping campers learn about and interact with money, personal finance topics, and mainstream financial service providers. Based on pre- and post-test data, it was determined an experiential real-world camp experience can increase the financial confidence and goal-setting abilities of young people.

A test of the association between the initial surge in COVID-19 cases and subsequent changes in financial risk tolerance

Review of Behavioral Finance, 2020

PurposeThe purpose of this paper is to provide an estimate of the degree to which financial risk ... more PurposeThe purpose of this paper is to provide an estimate of the degree to which financial risk tolerance changed in relation to the initial surge of COVID-19 cases in the US.Design/methodology/approachData from a large sample of investors and other consumers covering the period beginning April 2019 and ending in early May 2020 were used to estimate aggregate levels of financial risk tolerance and to determine if the willingness to take financial risk changed across five distinct periods in relation to the spread of COVID-19.FindingsA general reduction in aggregate levels of financial risk tolerance was observed during the initial peak of COVID-19 period and the subsequent declaration of a pandemic, with the most significant drop in risk tolerance being exhibited by those who were 25 years of age or younger.Practical implicationsThe findings from this study – primarily that in terms of FRT, the COVID-19 pandemic impacted young people disproportionately – suggest that in addition to...

Describing Gambling Affinity: The Role of Personality Traits

Journal of Financial Therapy, 2021

Various archaeological and historical evidence shows that the marginal area of the Negev desert o... more Various archaeological and historical evidence shows that the marginal area of the Negev desert of southern Israel enjoyed great agricultural prosperity in the Byzantine period (4th-7th centuries CE). Among the different types of agricultural installations are pigeon towers, which were built near the fields to produce fertilizer to enrich the nutrient-poor desert soils. Such extensive specialized agriculture practice was much less applied in the Negev in the successive Early Islamic period in the mid-7th century. Here we recovered in situ pigeon bones from five pigeon towers in the Negev, applied multiple characterization methods (FTIR, grinding curve, and C/N ratio) to estimate the preservation of bones, and achieved absolute dating for the abandonment of the towers. The obtained dates indicate rapid decline of agricultural activities in the second half of the 6th century CE and beginning of the 7th century. These findings, together with other evidence for Byzantine decline of agricultural hinterland and urban dysfunction of the settlements, suggest that the farming activities in the Negev declined in the Late Byzantine period (550-640 CE) and support the hypothesis that climatic-driven causes were the main trigger for the eventual cultural-societal decline of the Negev region.

An Assessment of the Strength of Association between Stated and Revealed Risk-Preference Measures (위험선호가 드러나도록 측정하는 방식과 위험선호를 지정하도록 측정하는 방식의 상호 관련성 평가)

SSRN Electronic Journal, 2020

<b>English Abstract:</b> Individual financial decision making is known to be associat... more <b>English Abstract:</b> Individual financial decision making is known to be associated with each decision maker’s risk preference. In general, risk preference has been measured either as a stated preference or as a revealed preference. While each assessment method has its own strengths and weaknesses, little research has been conducted to determine the level of association between these two measurement techniques. The purpose of this study was to provide evidence regarding the degree of association between stated and revealed risk-preference assessments. In addition, the extent to which people under- or over-state their preference for financial risk was evaluated by estimating how risk-preference assessment congruency is associated with risk-taking behavior. Using a survey with 534 adults, results from the present study suggest that while scores from stated and revealed financial risk-preference tests are not perfectly fungible, for over one third of individuals, there appears to be congruency between what is stated and what is revealed. For those who exhibit less preference congruency, differences do not appear to be related to risk-taking behavior. A financial decision maker’s revealed risk preference and the same person’s stated risk preference are related to financial risk-taking behavior. This finding suggests that the choice of one measurement technique over another by researchers, policy makers, and investors should not necessarily be made with an assumption that one assessment procedure is better than the other. What may be more important is understanding what is needed in the context of the risky decision being faced by a decision maker, be it a measure of choice or a measure of willingness.<br><br><b>Korean Abstract:</b> 개인의 재무의사결정은 위험에 대한 선호와 밀접한 관련이 있다고 알려져 왔다. 일반 적으로 위험에 대한 선호는 위험선호가 응답에 의해 드러나도록 측정하는 방식과 자신의 선호를 직접 지정하도록 하는 방식으로 측정한다. 이러한 방식은 각각 장단점을 가지고 있지만 두 가지 방식의 상호 관련성을 평가한 연구는 많이 존재하지 않는다. 본 연구의 목적은 위험선호가 드러나도록 측정하는 방식과 자신의 위험선호를 지정하는 방식이 서 로 어느 정도 관련이 있는가에 대하여 평가하고자 하는 것이다. 추가적으로 본 연구에서 는 개인들이 자신의 위험선호를 지정할 때 얼마나 과대 혹은 과소 평가 하는가와 평가에 의한 위험선호가 실제 위험추구 행동과는 어떠한 관련을 보이는지를 살펴보았다. 이러한 목적을 위하여 534명의 성인을 대상으로 온라인 조사를 실시한 결과 드러난 위험선호와 지정한 위험선호가 동일하게 나타난 사람들은 응답자의 약 36%였으며, 자신의 위험선호 를 지정하는 경우 드러나는 경우보다 과대평가하는 사람이 많은 것으로 나타났다. 하지 만, 개인의 위험선호를 드러나도록 측정하는 방식과 지정하여 측정하는 방식은 실제 위 험추구행동과 관련을 보이는 것으로 나타나, 두 가지 방식 중에서 어떠한 방식이 더 우 위에 있다고 평가하기는 어렵다고 판단되었다. 개인의 위험선호를 측정함에 있어서 중요 한 것은 투자의사결정에서 개인의 선택을 측정할 것인지 혹은 위험추구 행동에 참여하려 는 의향을 측정할 것인지를 파악해야 하는 것이라고 할 수 있다.

Factors Associated with a Composite Measure of Financial Behavior among Soldiers

Journal of Financial Counseling and Planning, 2015

Prior research has found a relationship between the health habits of individuals and their financ... more Prior research has found a relationship between the health habits of individuals and their financial well-being. Little research has been conducted, however, to explore the nature of the health-wealth connection. The purpose of this study was to explore and test the association of physical health behaviors, namely exercise and diet, and health information search behaviors, and financial wellness. Using data from the 2008 wave of National Longitudinal Survey of Youth (NLSY79), retirement planning activities were used as a proxy for financial wellness, and self-determination theory as a framework for the analysis, this study found that individuals who engage in health information search behaviors, such as reading the contents and nutrition details of food labels, are more likely to engage in financial planning activities.

A test of the relevant association between utility theory and subjective risk tolerance: Introducing the Profit-to-Willingness ratio

Journal of Behavioral and Experimental Finance, 2018

The purpose of this study was to document the empirical linkage between an objective risk toleran... more The purpose of this study was to document the empirical linkage between an objective risk tolerance utility function and a subjective risk tolerance scale. This study utilized return data from 2008 through 2013 for the S&P 500 as a proxy for the objective risk tolerance utility function and risk tolerance data obtained from a multidimensional psychometrically designed financial risk tolerance scale. Results from this study add to the literature by introducing the Profit-to-Willingness ratio (P/W ratio) and by showing investments in the stock market exhibit strong associates with the risk attitudes and preferences of investors. It was determined that an increase in the S&P 500 was associated with a decrease in aggregate risk tolerance during the period of analysis, whereas a decrease in the index increased willingness to take financial risk during the same period. Background and Research Question Investments in the stock market tend to be positively associated with the risk attitudes and preferences of market participants (Kumari & Mahakud, 2015). A fundamental aspect of modern portfolio theory is the notion that risk and returns are positively related and that elevated levels of risk are positively associated with higher expected profits when investments are made (Bodie, Kane, & Marcus, 2010; Markowitz, 1952). In other words, risk-aversion and its inverse, risk tolerance, are generally hypothesized to be strongly associated with investing behavior (Madura, 2014). There also appears to be a strong association between the concepts of risk aversion and risk tolerance and market volatility

Impacts of Financial Literacy on Loan Demand of Financially Excluded Households in China

SSRN Electronic Journal, 2017

and Economics 3 Government leaders around the world are designing national strategies to improve ... more and Economics 3 Government leaders around the world are designing national strategies to improve financial inclusion for populations traditionally excluded from the financial markets. Financial literacy is a key tool being used to bring economically vulnerable populations into the financial mainstream. We use data from the 2013 Chinese Household Finance Survey (CHFS) to investigate the impacts of various dimensions of financial literacy on the demand for bank and non-bank loans among rural, illiterate, and migrant populations in China. The findings show that those groups most vulnerable may be less likely to be positively impacted by financial literacy, especially when it comes to access to formal bank loans. Moreover, other factors such as those related to social networks and infrastructure may matter more than financial literacy. The findings suggest that barriers to access likely need to be overcome before financial literacy can have a chance at being effective. Interestingly, results varied across measures of financial literacy and financial inclusion. Researchers are encouraged to reexamine previous definitions and measures of financial literacy and inclusion and to develop a better understanding of the relationship between the two dimensions. This work has important implications for government leaders and international organizations designing national strategies to improve financial inclusion via financial literacy, especially for populations that have traditionally been excluded.

Impacts of Financial Literacy on the Loan Decisions of Financially Excluded Households in the People's Republic of China

SSRN Electronic Journal, 2019

Government leaders around the world are designing national strategies to improve financial inclus... more Government leaders around the world are designing national strategies to improve financial inclusion for populations traditionally excluded from the financial markets. Financial literacy is a key tool being used to bring economically vulnerable populations into the financial mainstream. Data from the 2013 China Household Finance Survey (CHFS) were used to investigate the impacts of various dimensions of financial literacy on the usage of bank and non-bank loans among rural, illiterate, and migrant populations in the People's Republic of China. The findings show that the most vulnerable groups may be less likely to benefit from financial literacy, especially when it comes to usage of formal bank loans. Other factors such as those related to social networks and infrastructure may matter more than financial literacy. Results were found to vary across measures of financial literacy and financial inclusion. The findings suggest that barriers to access likely need to be overcome so that financial literacy can be more effective. The current study provides important insights for policy makers and international organizations designing national strategies to improve financial inclusion via financial literacy, especially for populations that have been traditionally excluded. Researchers are encouraged to reexamine previous definitions and measures of financial literacy and inclusion to develop a better understanding of the relationship between the two dimensions.

Stock Market Volatility and Changes in Financial Risk Tolerance During the Great Recession

Journal of Financial Counseling and Planning, 2017

This study investigated the degree to which the financial risk tolerance of individuals was influ... more This study investigated the degree to which the financial risk tolerance of individuals was influenced by volatility in the U.S. equities market during the period of the Great Recession. Based on data from a valid and reliable risk tolerance scale and return information for the Standard and Poor’s (S&P) 500 index, there does appear to be some associations between daily market volatility and changes in risk tolerance scores. Changes in risk tolerance scores were also calculated using short- and intermediate-term volatility measures. The relationships do vary, however, with evidence supporting the relationship only 64% of the time. Overall, changes in financial risk tolerance scores were found to be modest. Although not following hypothesized directions at all times, risk tolerance was not influenced by the length of volatility measurements.

The Investment Risk Tolerance Assessment: A Resource for Extension Educators

Journal of Extension

This article provides a brief review of investment risk tolerance, clarifications of terms used t... more This article provides a brief review of investment risk tolerance, clarifications of terms used to describe risk attitudes, and a description of an online tool, the Investment Risk Tolerance Assessment (IRTA). The IRTA is a research-based tool that provides a score indicating a personalized analysis of a user's willingness to take financial risk. Extension educators can add value to the lives of their clientele by providing assistance in assessing risk tolerance in a valid and reliable manner. For this reason, the IRTA should be a useful addition to Extension educators' toolboxes.

The Moderating Effect of Financial Knowledge on Financial Risk Tolerance

Journal of Risk and Financial Management

The purpose of this paper is to describe a study that was designed to determine to what extent su... more The purpose of this paper is to describe a study that was designed to determine to what extent subjective and objective measures of financial knowledge moderate the relationship between an investor’s financial risk tolerance and demographic factors thought to be important descriptors of an investor’s willingness to take a financial risk. It was determined that those who identified as male, and those with more attained education and income, exhibited higher investment risk tolerance (IRT). Subjective financial knowledge (SFK) was positively associated with IRT. The relationship between gender and IRT was moderated by SFK, whereas the relationship between IRT and age was moderated by objective financial knowledge (OFK). A positive relationship between education and IRT was noted, but the relationship was moderated by OFK, whereas the association between IRT and household income was moderated by SFK. Findings from this study indicate that while SFK and OFK are positively correlated, th...

Does Miscalibration of Financial Risk Tolerance Describe Portfolio Holdings?

Academia Letters

Does Miscalibration of Financial Risk Tolerance Describe Portfolio Holdings?

Academia Letters, 2022

Does Miscalibration of Financial Risk Tolerance Describe Portfolio Holdings?

Academia Letters, 2022

An Assessment of the Association between Political Orientation and Financial Risk Tolerance

Journal of Risk and Financial Management

The purpose of this paper is to present findings from research that was undertaken to answer the ... more The purpose of this paper is to present findings from research that was undertaken to answer the following questions. First, to what extent is political orientation associated with financial risk tolerance, and second, to what degree is political orientation predictive of changes in risk tolerance across periods? Using panel collected before and after the 2020 U.S. presidential election, it was determined that the strength of affiliation with the Republican and Democratic Parties was descriptive of cross-sectional financial risk tolerance. Republicans were found to exhibit greater risk tolerance compared with Democrats. Across periods, the risk tolerance of Republicans was less stable, whereas the financial risk tolerance of Democrats was more stable. A significant decrease in risk tolerance was observed for those affiliating as a Republican pre-election to post-election. When political orientation was measured on a scale, the decrease in risk tolerance across periods for Republican...

What Role Does Financial Risk Tolerance Play in Mediating Investing Behavior

The present study offers an alternative explanation for the so-called gender and marital (cohabit... more The present study offers an alternative explanation for the so-called gender and marital (cohabitation) status asset gap. The working hypothesis was that risk tolerance might have a mediation effect on investment behavior. Results show that financial risk tolerance significantly mediated the effects of gender on investment behavior. Similarly, risk tolerance played a small yet significant mediating role between cohabitation status and investment behavior. It is possible that what appears to be a gender or cohabitation status asset gap may be more closely related to differences in financial risk tolerance, regardless of gender or cohabitation status.

Infrastructure, Urbanization, and Demand for Bank and Non-Bank Loans of Households in the People’s Republic of China

Financial inclusion plays an important role in giving households greater access to borrowing oppo... more Financial inclusion plays an important role in giving households greater access to borrowing opportunities, which in turn can be used to improve human capital accumulation, socioeconomic status, and long-run economic development. One way to enhance households’ access to and usage of the financial system, especially the formal banking system, is to ensure that an adequate infrastructure exists within their community. This study uses data from the 2013 Chinese Household Finance Survey to investigate how the infrastructure affects the usage of formal bank loans for both urban and rural households in the People’s Republic of China (PRC). The analysis is extended to investigate the impacts of the infrastructure on non-bank loans. The results suggest that the infrastructure, in a variety of forms (e.g., physical, financial, technological, social, and informational), is significantly associated with the loan demand—most notably for urban households using formal bank loans. Further, those l...

An Evaluation of the Effect of the COVID-19 Pandemic on the Risk Tolerance of Financial Decision Makers

Finance Research Letters, 2021

Baby universes (inflationary or non-inflationary) are regions of spacetime that disconnect from t... more Baby universes (inflationary or non-inflationary) are regions of spacetime that disconnect from the original ambient spacetime, which we take to be asymptotically flat spacetime. A particular kind of baby universe solution, involving string-like matter, is studied to show that it can be formed by "investing" an arbitrarily small amount of energy, i.e. it can appear from an almost flat space at the classical level. Since this possibility has not yet been clearly recognized in the literature, we then discuss in detail its properties, relevance and possible generalizations.

Characteristics of random responders in a financial risk-tolerance questionnaire

The possibility of random response occurring, which can result in Type II errors, is possible whe... more The possibility of random response occurring, which can result in Type II errors, is possible whenever a financial risk-tolerance questionnaire is administered. This study was designed to apply interitem standard deviation (ISD) scores, as introduced by Marjanovic, Holden, Struthers, Cribbie, and Greenglass (2015), to identify responders to a financial risk-tolerance questionnaire as hyperconsistent, conscientious, or random. Hyper-consistent responders were found to be more likely to be older married men who make their own financial and investment decisions. Those classified as hyperconsistent exhibited the lowest risk-tolerance scores. Conscientious responders were more likely to report having a high level of attained education and to rely on someone else when making financial and investment decisions. Financial risk-tolerance scores for conscientious responders fell between scores for hyper-consistent and random responders. Random responders were found to be younger, single, less...

The role of financial literacy in describing the use of professional financial advisors before and during the COVID-19 pandemic

Journal of Financial Services Marketing, 2021

This paper documents the effect of the COVID-19 pandemic on the use of profession financial advis... more This paper documents the effect of the COVID-19 pandemic on the use of profession financial advisors across a broad sample of financial decision makers (N = 16,431). Findings show that financial literacy played a significant role in describing the use of financial advisors in the USA before and during the pandemic. Those who exhibited higher levels of financial literacy were more likely to use the services of professional financial advisors. Based on a series of regression tests, it was determined that the effect of COVID-19 on the use of financial advisors was, to some extent, moderated by financial literacy.

Improving Youth Financial Literacy: A Profile of Middle School Camp Attendees

Journal of Extension, 2021

The purpose of this paper is to present a profile of middle-school-age youth who participated in ... more The purpose of this paper is to present a profile of middle-school-age youth who participated in a week- long experiential residential camp focused on helping campers learn about and interact with money, personal finance topics, and mainstream financial service providers. Based on pre- and post-test data, it was determined an experiential real-world camp experience can increase the financial confidence and goal-setting abilities of young people.

A test of the association between the initial surge in COVID-19 cases and subsequent changes in financial risk tolerance

Review of Behavioral Finance, 2020

PurposeThe purpose of this paper is to provide an estimate of the degree to which financial risk ... more PurposeThe purpose of this paper is to provide an estimate of the degree to which financial risk tolerance changed in relation to the initial surge of COVID-19 cases in the US.Design/methodology/approachData from a large sample of investors and other consumers covering the period beginning April 2019 and ending in early May 2020 were used to estimate aggregate levels of financial risk tolerance and to determine if the willingness to take financial risk changed across five distinct periods in relation to the spread of COVID-19.FindingsA general reduction in aggregate levels of financial risk tolerance was observed during the initial peak of COVID-19 period and the subsequent declaration of a pandemic, with the most significant drop in risk tolerance being exhibited by those who were 25 years of age or younger.Practical implicationsThe findings from this study – primarily that in terms of FRT, the COVID-19 pandemic impacted young people disproportionately – suggest that in addition to...

Describing Gambling Affinity: The Role of Personality Traits

Journal of Financial Therapy, 2021

Various archaeological and historical evidence shows that the marginal area of the Negev desert o... more Various archaeological and historical evidence shows that the marginal area of the Negev desert of southern Israel enjoyed great agricultural prosperity in the Byzantine period (4th-7th centuries CE). Among the different types of agricultural installations are pigeon towers, which were built near the fields to produce fertilizer to enrich the nutrient-poor desert soils. Such extensive specialized agriculture practice was much less applied in the Negev in the successive Early Islamic period in the mid-7th century. Here we recovered in situ pigeon bones from five pigeon towers in the Negev, applied multiple characterization methods (FTIR, grinding curve, and C/N ratio) to estimate the preservation of bones, and achieved absolute dating for the abandonment of the towers. The obtained dates indicate rapid decline of agricultural activities in the second half of the 6th century CE and beginning of the 7th century. These findings, together with other evidence for Byzantine decline of agricultural hinterland and urban dysfunction of the settlements, suggest that the farming activities in the Negev declined in the Late Byzantine period (550-640 CE) and support the hypothesis that climatic-driven causes were the main trigger for the eventual cultural-societal decline of the Negev region.

An Assessment of the Strength of Association between Stated and Revealed Risk-Preference Measures (위험선호가 드러나도록 측정하는 방식과 위험선호를 지정하도록 측정하는 방식의 상호 관련성 평가)

SSRN Electronic Journal, 2020

<b>English Abstract:</b> Individual financial decision making is known to be associat... more <b>English Abstract:</b> Individual financial decision making is known to be associated with each decision maker’s risk preference. In general, risk preference has been measured either as a stated preference or as a revealed preference. While each assessment method has its own strengths and weaknesses, little research has been conducted to determine the level of association between these two measurement techniques. The purpose of this study was to provide evidence regarding the degree of association between stated and revealed risk-preference assessments. In addition, the extent to which people under- or over-state their preference for financial risk was evaluated by estimating how risk-preference assessment congruency is associated with risk-taking behavior. Using a survey with 534 adults, results from the present study suggest that while scores from stated and revealed financial risk-preference tests are not perfectly fungible, for over one third of individuals, there appears to be congruency between what is stated and what is revealed. For those who exhibit less preference congruency, differences do not appear to be related to risk-taking behavior. A financial decision maker’s revealed risk preference and the same person’s stated risk preference are related to financial risk-taking behavior. This finding suggests that the choice of one measurement technique over another by researchers, policy makers, and investors should not necessarily be made with an assumption that one assessment procedure is better than the other. What may be more important is understanding what is needed in the context of the risky decision being faced by a decision maker, be it a measure of choice or a measure of willingness.<br><br><b>Korean Abstract:</b> 개인의 재무의사결정은 위험에 대한 선호와 밀접한 관련이 있다고 알려져 왔다. 일반 적으로 위험에 대한 선호는 위험선호가 응답에 의해 드러나도록 측정하는 방식과 자신의 선호를 직접 지정하도록 하는 방식으로 측정한다. 이러한 방식은 각각 장단점을 가지고 있지만 두 가지 방식의 상호 관련성을 평가한 연구는 많이 존재하지 않는다. 본 연구의 목적은 위험선호가 드러나도록 측정하는 방식과 자신의 위험선호를 지정하는 방식이 서 로 어느 정도 관련이 있는가에 대하여 평가하고자 하는 것이다. 추가적으로 본 연구에서 는 개인들이 자신의 위험선호를 지정할 때 얼마나 과대 혹은 과소 평가 하는가와 평가에 의한 위험선호가 실제 위험추구 행동과는 어떠한 관련을 보이는지를 살펴보았다. 이러한 목적을 위하여 534명의 성인을 대상으로 온라인 조사를 실시한 결과 드러난 위험선호와 지정한 위험선호가 동일하게 나타난 사람들은 응답자의 약 36%였으며, 자신의 위험선호 를 지정하는 경우 드러나는 경우보다 과대평가하는 사람이 많은 것으로 나타났다. 하지 만, 개인의 위험선호를 드러나도록 측정하는 방식과 지정하여 측정하는 방식은 실제 위 험추구행동과 관련을 보이는 것으로 나타나, 두 가지 방식 중에서 어떠한 방식이 더 우 위에 있다고 평가하기는 어렵다고 판단되었다. 개인의 위험선호를 측정함에 있어서 중요 한 것은 투자의사결정에서 개인의 선택을 측정할 것인지 혹은 위험추구 행동에 참여하려 는 의향을 측정할 것인지를 파악해야 하는 것이라고 할 수 있다.

Factors Associated with a Composite Measure of Financial Behavior among Soldiers

Journal of Financial Counseling and Planning, 2015

Prior research has found a relationship between the health habits of individuals and their financ... more Prior research has found a relationship between the health habits of individuals and their financial well-being. Little research has been conducted, however, to explore the nature of the health-wealth connection. The purpose of this study was to explore and test the association of physical health behaviors, namely exercise and diet, and health information search behaviors, and financial wellness. Using data from the 2008 wave of National Longitudinal Survey of Youth (NLSY79), retirement planning activities were used as a proxy for financial wellness, and self-determination theory as a framework for the analysis, this study found that individuals who engage in health information search behaviors, such as reading the contents and nutrition details of food labels, are more likely to engage in financial planning activities.

A test of the relevant association between utility theory and subjective risk tolerance: Introducing the Profit-to-Willingness ratio

Journal of Behavioral and Experimental Finance, 2018

The purpose of this study was to document the empirical linkage between an objective risk toleran... more The purpose of this study was to document the empirical linkage between an objective risk tolerance utility function and a subjective risk tolerance scale. This study utilized return data from 2008 through 2013 for the S&P 500 as a proxy for the objective risk tolerance utility function and risk tolerance data obtained from a multidimensional psychometrically designed financial risk tolerance scale. Results from this study add to the literature by introducing the Profit-to-Willingness ratio (P/W ratio) and by showing investments in the stock market exhibit strong associates with the risk attitudes and preferences of investors. It was determined that an increase in the S&P 500 was associated with a decrease in aggregate risk tolerance during the period of analysis, whereas a decrease in the index increased willingness to take financial risk during the same period. Background and Research Question Investments in the stock market tend to be positively associated with the risk attitudes and preferences of market participants (Kumari & Mahakud, 2015). A fundamental aspect of modern portfolio theory is the notion that risk and returns are positively related and that elevated levels of risk are positively associated with higher expected profits when investments are made (Bodie, Kane, & Marcus, 2010; Markowitz, 1952). In other words, risk-aversion and its inverse, risk tolerance, are generally hypothesized to be strongly associated with investing behavior (Madura, 2014). There also appears to be a strong association between the concepts of risk aversion and risk tolerance and market volatility

Impacts of Financial Literacy on Loan Demand of Financially Excluded Households in China

SSRN Electronic Journal, 2017

and Economics 3 Government leaders around the world are designing national strategies to improve ... more and Economics 3 Government leaders around the world are designing national strategies to improve financial inclusion for populations traditionally excluded from the financial markets. Financial literacy is a key tool being used to bring economically vulnerable populations into the financial mainstream. We use data from the 2013 Chinese Household Finance Survey (CHFS) to investigate the impacts of various dimensions of financial literacy on the demand for bank and non-bank loans among rural, illiterate, and migrant populations in China. The findings show that those groups most vulnerable may be less likely to be positively impacted by financial literacy, especially when it comes to access to formal bank loans. Moreover, other factors such as those related to social networks and infrastructure may matter more than financial literacy. The findings suggest that barriers to access likely need to be overcome before financial literacy can have a chance at being effective. Interestingly, results varied across measures of financial literacy and financial inclusion. Researchers are encouraged to reexamine previous definitions and measures of financial literacy and inclusion and to develop a better understanding of the relationship between the two dimensions. This work has important implications for government leaders and international organizations designing national strategies to improve financial inclusion via financial literacy, especially for populations that have traditionally been excluded.

Impacts of Financial Literacy on the Loan Decisions of Financially Excluded Households in the People's Republic of China

SSRN Electronic Journal, 2019

Government leaders around the world are designing national strategies to improve financial inclus... more Government leaders around the world are designing national strategies to improve financial inclusion for populations traditionally excluded from the financial markets. Financial literacy is a key tool being used to bring economically vulnerable populations into the financial mainstream. Data from the 2013 China Household Finance Survey (CHFS) were used to investigate the impacts of various dimensions of financial literacy on the usage of bank and non-bank loans among rural, illiterate, and migrant populations in the People's Republic of China. The findings show that the most vulnerable groups may be less likely to benefit from financial literacy, especially when it comes to usage of formal bank loans. Other factors such as those related to social networks and infrastructure may matter more than financial literacy. Results were found to vary across measures of financial literacy and financial inclusion. The findings suggest that barriers to access likely need to be overcome so that financial literacy can be more effective. The current study provides important insights for policy makers and international organizations designing national strategies to improve financial inclusion via financial literacy, especially for populations that have been traditionally excluded. Researchers are encouraged to reexamine previous definitions and measures of financial literacy and inclusion to develop a better understanding of the relationship between the two dimensions.

Stock Market Volatility and Changes in Financial Risk Tolerance During the Great Recession

Journal of Financial Counseling and Planning, 2017

This study investigated the degree to which the financial risk tolerance of individuals was influ... more This study investigated the degree to which the financial risk tolerance of individuals was influenced by volatility in the U.S. equities market during the period of the Great Recession. Based on data from a valid and reliable risk tolerance scale and return information for the Standard and Poor’s (S&P) 500 index, there does appear to be some associations between daily market volatility and changes in risk tolerance scores. Changes in risk tolerance scores were also calculated using short- and intermediate-term volatility measures. The relationships do vary, however, with evidence supporting the relationship only 64% of the time. Overall, changes in financial risk tolerance scores were found to be modest. Although not following hypothesized directions at all times, risk tolerance was not influenced by the length of volatility measurements.