Financial risk tolerance of Hong Kong adolescents: A hierarchical model

Financial risk tolerance (FRT) in adolescents is as important as that in adults; however, it remains underexplored in the literature. This study evaluated demographic, socioeconomic, psychological, and cognitive factors associated with FRT in a sample of Hong Kong adolescents. Results from a survey of adolescents revealed that family income, future orientation, perceived Chinese reading skills, and subjective financial knowledge were positively associated with FRT, while financial education experience was negatively associated with FRT. These findings indicate that establishing confidence in knowledge, ability, and the future, rather than improving objective cognition, could help increase the willingness of adolescents living in economically disadvantaged families to take financial risks when making important decisions.