Elkin R. Isaac Student Research Symposium

The 20th annual Symposium will be held on Thursday, April 23, 2009.

Age and Financial Risk-Taking: Mediating and Moderating Roles of Sensation Seeking and Materialism
Norris 102, 1:15 PM

Kevin Zabel, '09 47
Majors: Psychology, Economics and Management
Hometown: Three Oaks, MI

Sponsor(s): Andrew Christopher
Support: FURSCA

Abstract:
Much research has established an inverse relationship between age and financial risk-taking tendencies. However, less is known about the potential mediating and moderating mechanisms of this relationship. A mediator is a variable that affects a relationship among all levels of a predictor variable (age), whereas a moderator affects a relationship at only one particular level of a predictor variable. My research examined sensation seeking (a positive reaction to or desire for stimulating, exciting, and novel kinds of experiences) and materialism (value a consumer places on the acquisition and possession of material objects) as potential mediators and moderators of the established age and financial risk-taking relationship.

A total of 299 participants completed measures of investment risk-taking, sensation seeking, materialism, and demographic information. Hierarchical multiple regression analyses revealed that age initially accounted for significant variability (4.1%) in financial risk-taking. A Sobel Test revealed that sensation seeking completely mediated the relationship between age and financial risk-taking, as age now accounted for significantly less variability (0.8%, z = -2.35, p = .019). In comparison, a Sobel Test revealed that materialism had no meditational effect regarding the age and financial risk-taking relationship, as age accounted for less, but not significantly less, variability (1.9%, z = -1.93, p = .054). No moderational effects of sensation seeking or materialism on the relationship between age and risk-taking were found. Results suggest sensation seeking’s role as a mediator in a host of other risk-taking contexts, and limit the extent of materialism’s role as a mediator in other risk-taking contexts.