# Exploring the relationship between social activities and financial risk aversion in adults aged 50 + with depression caseness

## TL;DR

Participating in social activities helps older adults with depression take more financial risks, which could improve their mental health and benefit the economy.

## Contribution

This study is the first to explore how social activities influence financial risk-taking in older adults with depression.

## Key findings

- Social activity participants showed higher odds of financial risk-taking, both intentionally and behaviorally.
- Educational or training courses were the most common social activities linked to risky investments.
- The effect remained significant after controlling for factors like age, gender, and income.

## Abstract

Risk aversion due to depression is common among older adults, and social participation is associated with improved mental health and a lower risk of late-life depression. However, little is known about the connection between participation in social activities and risky financial decisions among adults with depression. Thus, we aim to examine the connection between participation in social activities and taking financial risks and investing in risky financial assets (with high-return potential) in such individuals, differentiated by age and gender. The study also focuses on analyzing the percentage of investors within each social activity, their attendance frequency, and motivation.

The data was obtained from the Survey of Health, Ageing and Retirement in Europe (SHARE) database Wave 2 (2006–2010). The study included 8,769 individuals aged 50 + with depression caseness, from 15 European countries and Israel who answered the question on participation in social activities and reported financial risk-taking intentions or behaviors (investing in stocks or shares, mutual funds or managed investment accounts, and both). The study utilized Pearson chi-square, odds ratios, Z, and hierarchical logistic regression tests.

The odds for taking financial risks and investing in risky financial assets were higher for those participating in social activities compared to those who did not, on both intentional (by 173%) and behavioral (by 240–397%) levels. Such social activities (attended at least once a week, without financial motivation) have been shown to be primarily represented by educational or training courses — where 33% of participants invested in risky financial assets. The connection persisted after controlling for gender, age, marital status, children, income.

By overcoming the subjects’ financial risk aversion, participation in social activities may help improve mental health in individuals aged 50 + with depression caseness. This has important implications for policymakers in healthcare, who by updating healthcare policies can fund and facilitate participation in social activities. As a result, the national healthcare system may benefit from lower hospitalization-related expenses, and generate higher cash flows into the country’s economy using the population’s renewed interest in investing available funds. These results are relevant in the wake of COVID-19 that increased loneliness and depression rates.

The online version contains supplementary material available at 10.1186/s13584-024-00621-z.