Personal life events and individual risk preferences
“Marriage, parenthood and work influence risk preferences”
Measuring risk preferences plays an important role in the Future Pensions Act. The financial industry and policymakers often implicitly assume that a person’s risk preferences remain stable over time. However, personal life events could seriously impact these preferences. Therefore this study investigated whether personal changes in marital status, parenthood and employment are associated with changes in risk preferences and how long such effects last. Preferences were elicited using self-assessment surveys (stated risk preferences) and methods where people could earn real money (revealed risk preferences).

Key Takeaways for the Industry
- The impact of life events on risk preferences should not be underestimated but more research is necessary for robust results.
- It could be important when risk preferences are elicited in a person’s life cycle and to reassess after life events occured.
- Knowledge about the impact of life events on risk preferences is fragmented so far and requires more systematic research.