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One possible explanation as to why individuals have differing set-points is
Bankruptcy Costs
Expenses and fees associated with the process of declaring bankruptcy, including legal, administrative, and any potential asset liquidation costs.
Business Risk
The risk inherent in the operations of the firm, prior to the financing decision. Thus, business risk is the uncertainty inherent in a total risk sense, future operating income, or earnings before interest and taxes. Business risk is caused by many factors. Two of the most important are sales variability and operating leverage.
Standard Deviation
A statistical measure of the dispersion or variability of a set of data points, often used in finance to gauge investment risk.
Expected Earnings
The forecasted income of a company, often estimated by analysts based on historical data and future projections, indicating potential future profitability.
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