This chapter provides an overview of the important role financial risk tolerance plays in shaping consumer financial decisions. A review of normative and descriptive models of risk tolerance is provided. Additional discussion regarding the measurement of risk tolerance is also presented. The chapter includes the presentation of a conceptual model of the principal factors affecting financial risk tolerance with recommendations designed to enhance the consumer finance field’s knowledge of risk tolerance. The chapter concludes with a summary of additional research needed to better understand the multidimensional nature of risk tolerance.
CITATION STYLE
Grable, J. E. (2016). Financial Risk Tolerance. In Handbook of Consumer Finance Research: Second Edition (pp. 19–31). Springer International Publishing. https://doi.org/10.1007/978-3-319-28887-1_2
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