The effect of health shocks on financial risk preferences differs by personality traits

We investigate whether personality traits influence the impact of health shocks on financial risk preferences using 11 waves (1998-2008) from the US Health and Retirement Study (HRS). We model stock market participation and the share of risky assets in portfolios and stratify our sample into single person households and couples. Our results indicate that personality traits play a more important role in the portfolio choices for couples than for single people. Moreover, there are differences between women and men within couples, and between chronic and acute health shocks.