Featured Research

from universities, journals, and other organizations

No Risk, No Fun? People Who Take Risks More Satisfied With Their Lives

September 19, 2005
University of Bonn
Tall people are more prepared to take risks than small people, women are more careful than men, and the willingness to take risks markedly decreases with age: These are the findings arrived at by researchers from the Institute for the Study of Labor (IZA), the University of Bonn and the German Institute for Economic Research (DIW) in Berlin.

Related Articles

Theinterviewees were supposed to imagine that they had won 100,000 eurosin a lottery, part of which they could invest in a bank. There was a50% likelihood that they would thus double the amount invested withintwo years. However, the risk of losing half the money invested was justas great.

'Under these conditions, women invest about 6,000 eurosless than men,' Professor Armin Frank, who researches and teaches atInstitute for the Study of Labor and at the University of Bonn,explains. 'Irrespective of gender, younger people invest a larger sumthan older ones – the annual difference is approximately €350.'Willingness to take risks also depends on body height: for everycentimetre the amount invested rises by €200. Furthermore, educatedparents have children who are more prepared to take risks.

Forthe study, more than 20,000 interviews were evaluated by Professor Falkand his colleagues Dr. Thomas Dohmen, David Huffman and Dr. Uwe Sunde,together with the DIW researchers Dr. Jόrgen Schupp and Professor GertWagner. In it the interviewees were asked to assess their willingnessto take risks on a scale from zero (= not willing to take any risks) toten (= very willing to take risks) and also to take part in theintellectual experiment described above. The results: Smokers are morewilling to take risks than non-smokers. The same is true for people whoprefer to invest their wealth in shares rather than in fixed-interestinvestments. And: People who enjoy taking risks are more content withtheir lives.

Bird in the hand or two in the bush?

Yet theway that interviewees assess themselves and their actual behaviour areoften worlds apart. In order to estimate how reliable the interviewdata were, the researchers invited 450 randomly selected test personsfrom all over the country to play a simple game of chance. This timereal money was at stake: to be precise, €300. This was the amount whichthe participants could win in a lottery – however, the risk that theywould leave empty-handed was just as great. Alternatively they couldaccept a fixed sum instead of taking part in the lottery - €10, €50,€150 or €200. The test persons were then required to say from whatfixed sum onwards they would prefer to bet on the potential €300 (the'birds in the bush') rather than taking the fixed sum (the 'bird in thehand'). The sooner the participants decided in favour of the bird inthe hand, the lower their willingness to take risks was.

'Theexperimental findings tally very well with the interview data,'Professor Falk emphasises. 'Those who claim in the interview to bewilling to take risks also show a high degree of willingness to takerisks in the experiment, where a relatively large sum of money is atstake.' Various statistics also seem to confirm the results: thus thenumber of traffic offences almost parallels the readiness to take risksin the age group concerned – in other words, the younger the driver,the more carelessly they drive.

Public services attract people averse to risk

However,the authors of the study are wary of interpreting their findings. It isprecisely the link between a willingness to take risks and beingsatisfied which is difficult to interpret. 'It's a classic chicken andthe egg problem,' Professor Falk comments. 'Are people who aresatisfied more optimistic because they are satisfied and thus moreready to take risks? Or is someone who is not afraid of risks a personwho takes their life into their own hands and shapes it the way theywant to?'

Incidentally, the willingness to take risks also seemsto influence the choice of occupation. The Bonn results show thatself-employed people are less cautious, whereas people working in thepublic services are more concerned about security.


The original article is available on the Internet at ftp://ftp.iza.org/dps/dp1730.pdf

Story Source:

The above story is based on materials provided by University of Bonn. Note: Materials may be edited for content and length.

Cite This Page:

University of Bonn. "No Risk, No Fun? People Who Take Risks More Satisfied With Their Lives." ScienceDaily. ScienceDaily, 19 September 2005. <www.sciencedaily.com/releases/2005/09/050919081143.htm>.
University of Bonn. (2005, September 19). No Risk, No Fun? People Who Take Risks More Satisfied With Their Lives. ScienceDaily. Retrieved October 25, 2014 from www.sciencedaily.com/releases/2005/09/050919081143.htm
University of Bonn. "No Risk, No Fun? People Who Take Risks More Satisfied With Their Lives." ScienceDaily. www.sciencedaily.com/releases/2005/09/050919081143.htm (accessed October 25, 2014).

Share This

More Mind & Brain News

Saturday, October 25, 2014

Featured Research

from universities, journals, and other organizations

Featured Videos

from AP, Reuters, AFP, and other news services

Academic Scandal Shocks UNC

Academic Scandal Shocks UNC

AP (Oct. 23, 2014) — A scandal involving bogus classes and inflated grades at the University of North Carolina was bigger than previously reported, a new investigation found. (Oct. 23) Video provided by AP
Powered by NewsLook.com
Working Mother Getaway: Beaches Turks & Caicos

Working Mother Getaway: Beaches Turks & Caicos

Working Mother (Oct. 22, 2014) — Feast your eyes on this gorgeous family-friendly resort. Video provided by Working Mother
Powered by NewsLook.com
What Your Favorite Color Says About You

What Your Favorite Color Says About You

Buzz60 (Oct. 22, 2014) — We all have one color we love to wear, and believe it or not, your color preference may reveal some of your character traits. In celebration of National Color Day, Krystin Goodwin (@kyrstingoodwin) highlights what your favorite colors may say about you. Video provided by Buzz60
Powered by NewsLook.com
First-Of-Its-Kind Treatment Gives Man Ability To Walk Again

First-Of-Its-Kind Treatment Gives Man Ability To Walk Again

Newsy (Oct. 21, 2014) — A medical team has for the first time given a man the ability to walk again after transplanting cells from his brain onto his severed spinal cord. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.


Breaking News:

Strange & Offbeat Stories


Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News


Free Subscriptions

Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile

Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?

Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile iPhone Android Web
Follow Facebook Twitter Google+
Subscribe RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins