The Daily Stat: Risk Lovers Are More Likely to Start Businesses, and to Fail in the Attempt

 

Are you having trouble viewing this email? If so, click here to see it in a web browser.

January 13, 2014 Risk Lovers Are More Likely to Start Businesses, and to Fail in the Attempt To test the hypothesis that people who are more tolerant of risk are more likely to become entrepreneurs—and to perform more poorly in that role—Hans K. Hvide of the University of Bergen in Norway and Georgios A. Panos of the University of Stirling in the UK examined investment data for 400,000 people in Norway. They found that those who invested in stocks, which are riskier than government bonds or savings accounts, are 50% more likely to subsequently become majority owners in new firms. And firms started by these stock investors have 25% lower sales and 15% lower return on assets than firms founded by people who are less tolerant of risk, probably because individuals who are tolerant of risk are willing to accept lower expected entrepreneurial returns for a given level of risk, the researchers say. SOURCE: Risk Tolerance and Entrepreneurship

PREVIOUS STATS A Long View Shows That the Global Downturn May Be Worse Than the Depression Blue-State Firms Are Harmed by Their Greater Spending on Social Responsibility Does Taking Paternity Leave Give Men a Longer Life? Being Underwater on Your Mortgage Reduces Your Earnings Why the Overconfident, Even After Being Exposed, Continue to Dominate If You Were a Poor Performer, You Wouldn't Be Aware of It

BEST SELLERS HBR's 10 Must Reads: The Essentials | HBR's 10 Must Reads Boxed Set | HBR Guide to Persuasive Presentations | HBR Guide to Better Business Writing | HBR Guide to Getting the Right Work Done

FEATURED PRODUCT The First 90 Days App for iPhone and Android MAKE YOUR NEXT CAREER TRANSITION A SUCCESS. Download The First 90 Days App today to help you stay ahead of the game. Download on the App Store Download on Google Play

FEATURED PRODUCT Everything I Ever Needed to Know about Economics I Learned from Online Dating HBR Press Book Conquering the dating market—from an economist's point of view. After more than twenty years, economist Paul Oyer found himself back on the dating scene—but what a difference a few years made. Dating was now dominated by sites like Match.com, eHarmony, and OkCupid. But Oyer had a secret weapon: economics. It turns out that dating sites are no different than the markets Oyer had spent a lifetime studying. Monster.com, eBay, and other sites where individuals come together to find a match gave Oyer startling insight into the modern dating scene. The arcane language of economics—search, signaling, adverse selection, cheap talk, statistical discrimination, thick markets, and network externalities—provides a useful guide to finding a mate. Using the ideas that are central to how markets and economics and dating work, Oyer shows how you can apply these ideas to take advantage of the economics in everyday life, all around you, all the time. For all online daters—and for anyone else swimming in the vast sea of the information economy—this book uses Oyer's own experiences, and those of millions of others, to help you navigate the key economic concepts that drive the modern age. Buy Now

ADVERTISEMENT

HBR.ORG | THE MAGAZINE | BLOGS | BOOKS | CASES | STORE | SUBSCRIBE TO HBR UNSUBSCRIBE | NEWSLETTERS PRIVACY POLICY | CONTACT Copyright © 2013 Harvard Business School Publishing, an affiliate of Harvard Business School. All rights reserved. Harvard Business Publishing 60 Harvard Way Boston, MA 02163 CUSTOMER SERVICE: 800-545-7685 (US/Canada) 1-617-783-7600 (outside the U.S. and Canada)