Scoring and Predicting Risk Preferences

October 22, 2017
94 Views


This study presents a methodology to determine risk scores of  individuals, for a given financial risk preference survey. To this end, we use a regression-based iterative algorithm to determine the weights for survey questions in the scoring process. Next, we generate classification models to classify individuals into risk-averse and risk-seeking categories, using a subset of survey questions. We illustrate the methodology through a sample survey with 656 respondents. We find that the demographic (indirect) questions can be almost as successful as risk-related (direct) questions in predicting risk preference classes of respondents. Using a decision-tree based classification model, we discuss how one can generate actionable business rules based on the findings.

Ertek, G., Kaya, M., Kefeli, C., Onur, Ö., Uzer, K. (2012) “Scoring and predicting risk preferences” in Behavior Computing: Modeling, Analysis, Mining and Decision. Eds: Longbing Cao, Philip S. Yu. Springer.

Note: This is the final draft version of this paper. Please cite this paper (or this final draft) as above.

Download
Scoring and Predicting Risk Preferences

view PDF

Download
Supplementary Document for “Scoring and Predicting Risk Preferences”

view PDF

Dr. Gürdal Ertek @ Social Web:

Dr. Gürdal Ertek @ TwitterDr. Gürdal Ertek @ LinkedIn

You may be interested

Learning and Personal Attributes of University Students in Predicting and Classifying the Learning Styles:
Uncategorized
29 views
Uncategorized
29 views

Learning and Personal Attributes of University Students in Predicting and Classifying the Learning Styles:

Dr. Gurdal Ertek - December 8, 2017

[caption id="attachment_1093" align="alignnone" width="707"] Fig. 1. The nine-region learning style grid[/caption] Learning and Personal Attributes of University Students in Predicting…

A Framework for Mining RFID Data From Schedule-Based Systems
Uncategorized
27 views
Uncategorized
27 views

A Framework for Mining RFID Data From Schedule-Based Systems

Dr. Gurdal Ertek - November 24, 2017

[caption id="attachment_1082" align="alignnone" width="1019"] Fig. 1. A schedule-based system where entities entering and exiting the system are tracked with RFID.[/caption]…

Wind Turbine Accidents: A Data Mining Study
Data Science
470 views
Data Science
470 views

Wind Turbine Accidents: A Data Mining Study

Dr. Gurdal Ertek - November 12, 2017

Fig. 1. The cause-effect relationship and stages where an accident occurs. Wind Turbine Accidents: A Data Mining Study While the…