Desperation or Desire? The Role of Risk Aversion in Marriage

Christy Spivey, Southern Illinois University Edwardsville (SIUE)

The effect of an individual’s risk aversion on time to marriage is examined using survival analysis. The financial risk aversion measure is based on a series of hypothetical gambles over family income that were offered to respondents of the National Longitudinal Survey of Youth 1979. A search model predicts that the more risk averse the individual, the shorter the time to first marriage. The estimates support the theory, indicating that risk aversion significantly affects time to marriage, with more risk averse respondents marrying sooner than their more risk loving counterparts. Within-family analyses using sibling data reveal a similar pattern. In addition, the effect of risk aversion on time to marriage is larger in magnitude and more statistically significant for men. One possible explanation for the different results between the sexes is that women value risk aversion as a desirable trait in potential mates.