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How elevation impacts risk taking

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There’s an old saying that we shape our buildings and environments and then they in turn shape us. 

Here is a fascinating research report about “the influence of physical elevation in buildings on risk preferences.” I discovered it through this MarketWatch article, which my friend John forwarded me this afternoon. 

Here is a quote from the article:

We then examined the correlation between hedge-fund volatility and office location in terms of number of stories above ground. We found that as the elevation of hedge-fund managers’ offices increased, they were more willing to take risks that resulted in more volatility. This was true even when statistically controlling for factors such as total assets, fund strategy and several other variables that could have led more resourceful hedge funds to occupy expensive offices that are often found on higher levels of buildings.

Does this mean taller cities are also more volatile cities? Assuming this is all true, it once again proves that we are maybe not the rational decision makers that many us probably think we are.

Photo by Hala AlGhanim on Unsplash

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