Abstract
ABSTRACTMost Israelis live in big and small cities and two neighborhood types that are unique to Israel – the moshav and the kibbutz – thus offering a natural experimental field for exploring the relationship between place of residence and general and financial risk aversion. Based on a sample of 528 questionnaires, this study found that independent of one’s place of residence respondents proved more risk averse in their general decision-making than with regard to financial issues. The kibbutz respondents demonstrated the highest average level of risk aversion, followed by small-city dwellers, big-city residents, and moshav members. The kibbutz level of risk aversion is inconsistent with the Cushion Hypothesis, while the lowest level of risk aversion demonstrated by moshav residents suggests that facing an independent lifestyle and significant dilemmas on a daily basis reduces not only the individual’s level of risk aversion in general, but also the level of intimidation associated with financial issues.
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