Given the increasingly diverse world, financial service providers must be aware of a variety of consumers’ needs. This study investigated differences in financial risk tolerance between households with white and black respondents. Financial literacy was positively associated with high and some (versus no) financial risk tolerance for white households, but this relationship was not found for black households. The relationship between net worth and high financial risk tolerance differed significantly for black and white households. The current findings show that the frameworks used to explain the financial behaviors of white households may not be appropriate for all groups.
Patti Fisher, PhD, is an associate professor of consumer studies in the AHRM Department within the College of Liberal Arts and Human Sciences at Virginia Tech. She earned an MS and PhD in Family Resource Management with a specialization in Finance from Ohio State University. Her research interests include the financial behaviors of women and minority groups, household saving behaviors, and personal finance education. She has published in several academic journals and is on the editorial board of Journal of Financial Counseling and Planning and an associate editor and the financial well-being editor for the Journal of Financial Innovation.