The Mediating Role of Affect in the Relationship between the Big Five Factor Personality and Risk Aversion: A Structural Model

The purpose of this study was to analyze the relationship between the personality characteristics and their effects on risk aversion by the intermediary role of affect. The study suggests that positive and negative affect in individuals can play an intermediary role in the relationship between personality characteristics,risk aversion, and decision making. 265 undergraduate and postgraduate students completed the Ten-Item Personality Inventory and the Positive and Negative Affect Schedule (PANAS. Data were analyzed using structural equations modeling. Findings showed that the increase in extroversion characteristic was negatively and significantly associated with risk aversion; it was also found out that there was a negative and significant relationship between openness to experience and risk aversion. Furthermore, the relationship between adaptability and risk aversion in the presence of affect as the intermediary factor was not statistically significant. Risk aversion is closely interlaced and undeniably associated with the personality and mentality of the individuals. But, it has to be noted that the sciences related to the intended subjects are substantially new in this regard hence many of the intended topic’s angles are recognized and are worthy of discussion and study. Declaration of Interest: None.