Associations between risk preference and abroad experiences

Abstract

Risk preferences have been a research topic since utility theory enriched the economic thinking. Various findings show a significant influence of factors like gender or age, as well as certain life events like childbirth, on the level of risk preference, ranging from risk averse to risk seeking. However, no research on the influence of an international experience has been conducted to date. Abroad experiences have proven to impact certain personal development and abilities, such as creativity and employability skills. Thus, this thesis aims to determine if a lower risk aversion, and hence higher risk seeking tendencies, are related to work or educational experiences abroad. A survey-based approach with three types of risk preference measurements was conducted for two groups, one with and one without an abroad experience. Risk-taking behavior was measured using a gamble over lifetime income, a lottery gamble, and a general risk propensity scale (GRiPS). The main results support the idea that an abroad experience does affect risk preferences, indicating that participants with an abroad experience were more risk seeking than participants without an abroad experience, but only when risk preferences were measured using a general risk propensity scale. Evidence suggests this relationship may be causal.

Date of Award	30 Jun 2022
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Cristina Soares Pacheco Mendonça (Supervisor)