A History of Violence: The impact of early violence exposure on financial risk preferences
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2015-02-06
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Universidad EAFIT
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This paper examines whether growing up in areas with high homicide rates affects financial risk preferences. Our key conjecture is that individuals who have grown up in violent areas possess more risk averse financial preferences. We find support for this hypothesis using a unique dataset of mutual fund investors from one of Colombia’s largest stock brokers alongside Colombian official data on homicide rates.