* The pension fund holds much more of its money in cash than other comparable state pension funds and more than its allocation policy suggests. State Treasurer Dale Folwell routinely overrides the policy to prevent “rebalancing.” * Folwell emphasizes steeling the pension plan against stock market downturns. That’s led to the plan missing out on the big stock market gains of the last few years. Returns for the state pension fund are far lower than comparable public pension funds. * Folwell repeatedly liquidated stock to shift money to bonds and cash. *He has lowered the pension fund’s assumed rate of return in stages, which means the state and local governments have had to increase their contributions.
Research has also found being extroverted or introverted affects how people make decisions about Covid-19 precautions. A recent study of more than 8,500 people in Japan published in the journal PLOS One in October 2020 found that those who scored high on a scale of extraversion were 7% less likely to wear masks in public and avoid large gatherings, among other precautions.
Scientists believe that a person’s propensity to take risks is partly genetic and partly the result of early life experiences. Studies of twins have generally found that about 30% of the difference in individual risk tolerance is genetic. Certain negative childhood experiences including physical, emotional or sexual abuse, parental divorce, or living with someone who was depressed or abused drugs or alcohol are linked to risky behavior in adulthood like smoking and drinking heavily, other research has found.
And scientists have discovered that the brains of people who are more willing to take risks look different than those of people who are more cautious. In a study published in the journal Neuron in 2018 that involved scanning the brains of 108 young adults, scientists at the University of Pennsylvania found that participants who made riskier choices on a gambling task had differences in the structure and function of the amygdala, a part of the brain involved in detecting threats, and the prefrontal cortex, a region involved in executive functioning.
Theoretically, wealthier people should buy less insurance, and should self-insure through saving instead, as insurance entails monitoring costs. Here, we use administrative data for 63,000 individuals and, contrary to theory, find that the wealthier have better life and property insurance coverage. Wealth-related differences in background risk, legal risk, liquidity constraints, financial literacy, and pricing explain only a small fraction of the positive wealth-insurance correlation. This puzzling correlation persists in individual fixed-effects models estimated using 2,500,000 person-month observations. The fact that the less wealthy have less coverage, though intuitively they benefit more from insurance, might increase financial health disparities among households.