Socio-Economic Determinants of Risk-Taking Ability: The Role of Income and Age

PINKI GORAI

Socio-Economic Determinants of Risk-Taking Ability: The Role of Income and Age

Author(s)	Ms. PINKI GORAI
Country	India
Abstract	Risk-taking ability plays an important role in economic decision-making, particularly in areas such as investment, savings, and financial planning. Individuals often make decisions under uncertain conditions, and their willingness to take risks is influenced by various socio-economic factors. Among these factors, income and age are considered important determinants that shape an individual's risk preferences and financial behaviour. The present study examines the relationship between income, age, and risk-taking ability among individuals. The study is empirical in nature and is based on primary data collected from 50 households using structured questionnaires. A simple random sampling technique was used to select the respondents. To analyze the relationship between the variables, descriptive statistics, correlation analysis, and regression analysis were employed using SPSS software. The study considers income and age as independent variables, while risk-taking ability is treated as the dependent variable. The results of the analysis indicate that income has a positive and statistically significant impact on risk-taking ability, suggesting that individuals with higher income levels are more willing to engage in financial or investment risks due to greater financial security and capacity to absorb potential losses. In contrast, age shows a negative relationship with risk-taking ability, implying that risk tolerance tends to decline as individuals grow older. Younger individuals are generally more inclined to take risks because they have longer investment horizons and fewer financial responsibilities compared to older individuals. The findings highlight the importance of socio-economic characteristics in shaping individuals’ financial decision-making behaviour. The study suggests that policymakers, financial institutions, and financial advisors should consider demographic and economic factors such as income and age when designing financial products and promoting financial literacy. Enhancing awareness about risk management and investment planning can help individuals make more informed financial decisions and improve overall economic well-being.
Keywords	Risk-Taking Ability; Income; Age; Socio-Economic Factors; Financial Decision-Making; Risk Tolerance; Household Finance.
Published In	Volume 8, Issue 2, March-April 2026
Published On	2026-03-19

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Socio-Economic Determinants of Risk-Taking Ability: The Role of Income and Age

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