Financial
Counseling and Planning

The Journal of the Association for Financial
Counseling and
Planning Education

Volume 14 (2), 2003

Risk Tolerance
and the Investment Behavior of

Black and Hispanic Heads of Household

 Susan
Coleman[1]

Attitudes toward risk and
willingness to hold risky assets are compared for white, Hispanic, and
black
heads of household using data from the 1998 Survey of Consumer Finances.  Results indicate that Hispanic heads of
household evidenced a significantly higher level of risk aversion and
held a
significantly lower percentage of risky assets to net worth.  Contrary to prior research, the results for
black heads of household were not significant when we control for the
level of
household wealth suggesting that, although blacks may hold different
types of
assets than whites, they are not necessarily more risk averse.

Key words: 
Risk
tolerance, racial differences, asset
allocation