Risk Taking Across the Life Span and Around the Globe

In January 2016 Psychological Science published an article called “Propensity for Risk Taking Across the Life Span and Around the Globe“. We asked one of the authors, Prof. Rui Mata from the University of Basel, to comment on this study.

The Study

We investigated age differences in risk taking around the globe by analyzing data from the World Values Survey, an international survey that compiled the values and views of people from all over the world. In doing so, we compared a total of 147,118 responses from people aged 15 to 99 (52% women), from a total of 77 countries. Participants were asked to indicate their propensity to participate in adventurous and risky activities on a scale of one (very much like me) to six (not at all like me).The results showed that the propensity to take risks decreases with age in most countries, including Germany, Russia, and the US. In other countries, however, such as Nigeria, Mali, and Pakistan, risk behavior did not change much with age. More generally, the results suggest that in countries with great poverty and difficult living conditions, the propensity to take risks is higher and remains high even in old age: When we compared the current standards of living in these countries, looking at, for instance, poverty, homicide rate, income per capita, and income inequality, we found a clear connection between the levels of hardship in the country and its citizens’ propensity to take risks. In sum, whether people are willing to take risks in old age depends on external circumstances.One reason could be that citizens of countries in which resources are scarce have to take more risks and also compete with each other than in wealthier countries in order to thrive across adulthood.

Background

Ever since Adolph Quetelet described the relation between age and crime in the 19th century using population statistics, that we have known that young adults, in particular males, are more prone to taking risks, such as engaging in violence and criminal activities, relative to females and older adults. It was also known that there are significant cross-cultural and cohort differences in the patterns of age differences in risk taking, yet, the ultimate reasons for such differences had not been systematically investigated. Our results support theories from behavioral ecology that see risk taking as an adaptive strategy to deal with uncertainty in the environment, which leads to predictable patterns of individual and age differences in investment and reproductive strategies as a function of environmental resources and opportunities.

Future directions

The results highlight the fact that when studying human development phenomena, we need to take into account the interaction between humans and their environment. For research on decision making, this means that—unlike what many economists assume—individual propensity cannot be considered stable over time and are a function of individual life experiences. We have been using longitudinal data from the German Socio-economic Panel (SOEP) to trace individual and age-related changes in risk propensity in various areas of life and over a time span of up to ten years. Results from this study will represents the first study to survey people of all ages over a longer period of time in order to investigate how changes in risk disposition in the areas of finance, health, career, leisure time, and social life are a function of specific life events taking place across one’s life span.