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To what extent does income predict an individual’s risk profile in the UK (2012- 2014)

Wright, Joshua (2017): To what extent does income predict an individual’s risk profile in the UK (2012- 2014).

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Abstract

This study seeks to estimate whether income is predictive of an individual’s risk profile. The consensus amongst the existing literature is that income is predictive of an individual’s risk profile and the two do have a relationship. This study uses a quantitative approach by estimating a series of statistical models that estimate the relationship between an individual’s income and their risk profile using a large UK based longitudinal dataset. The research finds that income is positively related to risk and that for every £1,000 increase in income, an individual’s odds of becoming risk seeking increase by 1%. Moreover, the research finds that not only is income predictive of an individual’s risk, but so too are;; gender, education level, age and self-employment.

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