Poverty Linked to Greater Risk-Taking in Old Age

The impulse to take any type of risk, whether physical, social, legal, or financial, tends to decline as people get older. But new research shows that living in a poverty-stricken area or one of extreme hardship may continue to drive people to take risks throughout their entire lives, even in old age.

The study, based on data from 77 countries, was conducted by researchers from the University of Basel in Switzerland and Germany’s Max Planck Institute for Human Development. Their findings are published in the journal Psychological Science.

The researchers analyzed data from the World Values Survey, an international survey that reports the values and views of people from all over the world. They compared a total of 147,118 responses from people aged 15 to 99, 52 percent of whom were women, out of a total of 77 countries.

The focus of their investigation was risk propensity. Participants were asked to indicate their propensity towards adventurous and risky activities on a scale of one (applies to me very much) and six (does not apply to me at all).

The researchers also compared each country’s current standards of living, looking at indicators of hardship, for instance, economic and social poverty, homicide rate, income per capita, and income inequality.

Their findings indicate a clear connection between a country’s standards of living and its citizens’ willingness to take risks. In most countries, including Germany, Russia, and the U.S., for example, the willingness to take risks in an everyday context decreased with age.

Men, on average, are also much more likely to take risks than women. But in certain countries, such as Nigeria, Mali, and Pakistan, the researchers found that risk behavior remained more stable across age and was also more similar between the sexes.

“We were able to show that in countries with great poverty and difficult living conditions, the propensity to take risks remains high even in old age,” said Dr. Rui Mata, assistant professor and head of the Center for Cognitive and Decision Sciences at the University of Basel.

“One reason could be that citizens of countries in which resources are scarce have to compete with each other more fiercely than in wealthier countries.”

This held true for both men and women and may also account for the smaller differences between the sexes.

“The findings highlight the fact that when studying human development, we need to take into account the interactions between humans and their environment,” said Dr. Ralph Hertwig, director of the Center for Adaptive Rationality at the Max Planck Institute for Human Development.

“For research on decision making, this means that — unlike what many economists assume — individuals’ risk propensity cannot be considered stable over time. Our study instead shows that across many cultures, people tend to take fewer risks as they grow older. At the same time, this adaptive process also depends on local living condition sans existential needs.”

Source: University of Basel

Elderly man photo by shutterstock.