Self-efficacy and attitude to risk in the home-based self-employed: A longitudinal exploration

Daniel, Elizabeth and Owen, Robyn (2017). Self-efficacy and attitude to risk in the home-based self-employed: A longitudinal exploration. In: Institute for Small Business and Entrepreneurship Conference, 8-9 Nov 2017, Belfast.



Despite their economic and social contribution of home-based self-employment, the individuals who pursue this route to self-employment are often accorded less attention and respect than other forms of self-employment, being referred to in pejorative terms such as ‘lifestyle entrepreneurs’. They are considered to lack confidence in themselves or their business, termed self-efficacy, and are risk averse, leading them to start a home-based business.

This study compares the self-efficacy and risk tolerance of home-based self-employed with others that are self-employed but who work at other locations, such as in dedicated commercial premises.

Quantitative data are drawn from the large scale, longitudinal social studies database, Understanding Society. Variables at both the individual and household level, which is particularly important for home-based self-employment, are subject to multivariate analysis, allowing the intersectionality of variables to be explored.

The study finds no difference between the self-efficacy and risk tolerance of the home-based self-employed and those based in other locations. However, it finds significant differences between the groups in personal, household and employment variables. The null finding is viewed as an exoneration of home-based self-employed, suggesting their choice to base their business at home is not a response to a lack of confidence or aversion to risk, but a rational choice based on their personal, household and employment circumstances.

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