Household Bargaining, Financial Decision-Making and Risk Tolerance

Abstract

This study examines the financial investment decision-making and risk behaviors ofMalaysian men and women. It uses data obtained from a survey of employed Malaysians totest two opposing models of household decision making, the income pooling hypothesis andthe bargaining model. Ordinal probit regressions are estimated to determine if earning shareaffects decisions on financial investments, and to identify factors that affect risk tolerance ofmen and women. The results indicate that although both men and women practice autonomyin decisions related to financial investments, women have lower risk tolerance than men.The results on decision making are consistent with the bargaining model as reflected in theimportance of relative earning share in financial decision making.Keywords: Malaysia; Income Pooling Hypothesis; Bargaining Model; Financial Decision-Making; Risk Tolerance; Household.

Female Workers During Post Pandemic: Gender and Investment Decisions

“…Rental properties can also be used as a source of investment. Currently, investing in property is a lifestyle for investment purposes [32]. Property investment is made to generate rent or to get an increase in value or price or both.…”