The Big Five Personality and Risk Tolerance in Bali, Indonesia: An Empirical Study

I Wayan Suarjana, I Gusti Bagus Wiksuana, Luh Putu Wiagustini and Ida Bagus Panji Sedana

Purpose: To examine the impact of the big five personality, gender, financial literacy, religion and marital status on risk tolerance and investment decision. Methodology: The big five personality is one of the method to examine the personality type of the people that is common used in psychological discipline that uses 50 likert scale questions. Risk tolerance is measured Allais paradox, that uses lottery method where respondents are given two options of choices of reward probability, one option is high reward but has low probability and the other has lower reward and higher probability. The risk taker respondents will choose the higher reward and lower probability and vice versa. We analyzed the data using Warp PLS 7.0 with structural equation modeling (SEM). Findings: Neurocitism has an impact on risk tolerance and openness has an impact on risky investment decision. Gender, financial literacy, religion has an impact on risk taking but marital status has not significant impact on risk taking. Unique contribution to theory, practice and policy: This research involves aspects of psychology, demographics, investor behavior, and risk in investing.

Volume 12 | 08-Special Issue

Pages: 127-138

DOI: 10.5373/JARDCS/V12SP8/20202509