Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/317019 
Year of Publication: 
2023
Citation: 
[Journal:] Empirical Economics [ISSN:] 1435-8921 [Volume:] 66 [Issue:] 2 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2023 [Pages:] 735-761
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
We present evidence on how individual risk preferences are related to entrepreneurial investment among the wealthy. To do so, we use novel survey data from the top of the wealth distribution, which have been fully integrated into the 2019 German Socio-economic Panel Study. The data include private wealth balance sheets, in particular the value of own private business assets, and a standard measure of risk tolerance. We find that wealthy individuals are more likely to be entrepreneurs and invest a larger share of their wealth in their own businesses when they are more willing to take risks. A comparison with less wealthy individuals reveals that these associations are stronger among the wealthy. Since the wealthy dominate aggregate risky investment, their extraordinarily high preference for risk and its link to entrepreneurial activity should be taken into account in theory development, empirical analysis, and the design of public policies influencing the riskiness of income and wealth such as progressive taxation.
Subjects: 
Risk
Wealth
Entrepreneurship
Portfolio choice
JEL: 
J22
J23
L26
D14
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.