The Investment Risk Tolerance of Same-Sex Couples

Abstract

Although there are over one million same-sex couple households in the United States, there has not been much research on their investment attitudes and behavior. This study uses datasets from the combined 1992, 1995, 1998, and 2001 Surveys of Consumer Finance to compare same-sex couples to other household types in terms of risk tolerance and stock ownership. Same-sex couples are similar to married couples with a male respondent in terms of risk tolerance, and same-sex male couples are similar to married couples in terms of stock ownership. However, despite having higher risk tolerance, same-sex female couples are much less likely to own stock than predicted by their level of risk tolerance and objective characteristics. It is possible that financial advisors are underserving this market segment or giving inappropriate advice.