Evaluating Academic Decisions and Risk: A Study of University Business Students

Individual decision-making is often expressed through some combination of return or benefit within a context of risk assessment and assumption. Risk is generally defined as variability or chance of loss. Individuals are typically risk averse, where they require a greater benefit for each unit of risk in a decision. Students apply risk assessment when making financial decisions. This research models if risk aversion in making financial decisions extends to academic decisions. Prior literature discusses each decision category but does not adequately surmise correlation. In a survey of 671 university business students, the findings are that students approach risk differently between financial and academic decisions. In asking students if flipping a coin to decide patterns of paying money versus receiving money when risk is introduced, respondents are less willing to take financial risk when receiving money, but much less willing when paying money. When the question is structured to capture academic decisions, students are more willing to risk a lower grade in a class for higher reward longer-term, such as acquiring greater knowledge or improved employability.