Essays on Risk Aversion, Diversification and Non-Participation

My dissertation consists of three essays. The central theme of these essays is the psychological factors and biases that affect the portfolio allocation decision. The first essay entitled, “Are women more risk-averse than men?” examines the gender difference in risk aversion as revealed by actual investment choices. Using a sample that controls for biases in the level of education and finance knowledge, there is evidence that when individuals have the same level of education, irrespective of their knowledge of finance, women are no more risk-averse than their male counterparts. However, the gender-risk aversion relation is also a function of age, income, wealth, marital status, race/ethnicity and the number of children in the household. The second essay entitled, “Can diversification be learned?” investigates if investors who have superior investment knowledge are more likely to actively seek diversification benefits and are less prone to allocation biases. Results of cross-sectional analyses suggest that knowledge of finance increases the likelihood that an investor will efficiently allocate his direct investments across the major asset classes; invest in foreign assets; and hold a diversified equity portfolio. However, there is no evidence that investors who are more financially sophisticated make superior allocation decisions in their retirement savings. The final essay entitled, “The demographics of non-participation”, examines the factors that affect the decision not to hold stocks. The results of probit regression models indicate that when individuals are highly educated, the decision to not participate in the stock market is less related to demographic factors. In particular, when individuals have attained at least a college degree and have advanced knowledge of finance, they are significantly more likely to invest in equities either directly or indirectly through mutual funds or their retirement savings. There is also evidence that the decision not to hold stocks is motivated by short-term market expectations and the most recent investment experience. The findings of these essays should increase the body of research that seeks to reconcile what investors actually do (positive theory) with what traditional theories of finance predict that investors should do (normative theory).

A Study of the Relationship between Employee Virtuality and Technology Deviance as Mediated by Leadership and Employee Perceptions

Recent studies found that organizations have been investing significant capital in developing teams and employees in geographic areas where labor and resources are considerably cheaper. Furthermore, organizations are moving core operational activities such as research and development and back-office processes to globally distributed teams. However, several factors that are inherent to these virtual teams can have a negative impact on employee perceptions and engagement; specifically, the physical and temporal differences between employees and their supervisors, the lack of meaningful social interaction intrinsic to working relationships, and cultural biases that can be fostered when close, daily interactions is not there to help bridge the dissimilarity. When strategies are not in place to mitigate these deficiencies, it can cause virtual employees to disengage emotionally and intellectually from the organization, or lead them to feel justified in working against the best interest of the company. Past research indicates that although deviant behavior in the workplace is not new, transgressions committed by employees have been increasing significantly every year. Beyond the focus of why employees are motivated to act against the organization, to what extent do the recent changes to the organization’s structure influence this type of behavior through their actions at the macro (organizational) and micro level (leadership). In addition, there is a related phenomenon that has aided the transformation of the workplace – namely, the ubiquity of technology. In the context of workplace deviance, established research has documented an increasing trend of employees utilizing company technology as a medium and amplifier when harming the organization. It is important to understand whether technology has facilitated or hindered workplace deviance by virtue of the technology itself (as a means), and as part of the new employee roles created by the evolving technology (i.e, virtual employees). Therefore, it is important to identify how individual attitudes and behaviors can be affected by an employee’s degree of virtuality. This study will add to the understanding of how social interaction and physical proximity, leadership and other perception factors contribute to the changes organizations are experiencing as their structure evolves and adapts to compete in the new global environment.

Reanalysis of the 1954-1963 Atlantic Hurricane Seasons

HURDAT is the main historical archive of all tropical storms and hurricanes in the North Atlantic Basin, which includes the Caribbean Sea and Gulf of Mexico, from 1851 to the present. HURDAT is maintained and updated annually by the National Hurricane Center at Miami, Florida. Today, HURDAT is widely used by research scientists, operational hurricane forecasters, insurance companies, emergency managers and others. HURDAT contains both systematic biases and random errors. Thus, the reanalysis of HURDAT is vital. For this thesis, HURDAT is reanalyzed for the period of 1954-1963. The track and intensity of each existing tropical cyclone in HURDAT is assessed in the light of 21st century understanding and previously unrecognized tropical cyclones are detected and analyzed. The resulting changes will be recommended to the National Hurricane Center Best Track Change Committee for inclusion in HURDAT.

Maternal-Fetal Attachment and Health Behaviors among Women with HIV/AIDS

Background: Mothers with HIV often face personal and environmental risks for poor maternal health behaviors and infant neglect, even when HIV transmission to the infant was prevented. Maternal-fetal attachment (MFA), the pre-birth relationship of a woman with her fetus, may be the precursor to maternal caregiving. Using the strengths perspective in social work, which embeds MFA within a socio-ecological conceptual framework, it is hypothesized that high levels of maternal-fetal attachment may protect mothers and infants against poor maternal health behaviors. Objective: To assess whether MFA together with history of substance use, living marital status, planned pregnancy status, and timing of HIV diagnosis predict three desirable maternal health behaviors (pregnancy care, adherence to prenatal antiretroviral therapy–ART, and infant’s screening clinic care) among pregnant women with HIV/AIDS. Method: Prospective observation and hypothesis-testing multivariate analyses. Over 17 consecutive months, all eligible English- or Spanish-speaking pregnant women with HIV ( n = 110) were approached in the principal obstetric and screening clinics in Miami-Dade County, Florida at 24 weeks’ gestation; 82 agreed to enroll. During three data collection periods from enrollment until 16 weeks after childbirth (range: 16 to 32 weeks), participants reported on socio-demographic and predictor variables, MFA, and pregnancy care. Measures of adherence to ART and infant care were extracted from medical records. Findings: Sociodemographic, pregnancy, and HIV disease characteristics in this sample suggest changes in the makeup of HIV-infected pregnant women parallel to the evolution of the HIV epidemic in the USA over the past two decades. The MFA model predicted maternal health behaviors for pregnancy care (R2 = .37), with MFA, marital living status, and planned pregnancy status independently contributing ( = .50, = .28, = .23, respectively). It did not predict adherence to ART medication or infant care. Relevance: These findings provide the first focused evidence of the protective role of MFA against poor maternal health behaviors among pregnant women with HIV, in the presence of adverse life circumstances. Social desirability biases in some self-report measures may limit the findings. Suggestions are made for orienting future inquiry on maternal health behaviors during childbirth toward relationship and protection.