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The gender effect in risky asset holdings

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  • Halko, Marja-Liisa
  • Kaustia, Markku
  • Alanko, Elias

Abstract

We study the relation between gender and stock holdings in Finland, a particularly gender equal country. We show that it is crucial to control for risk aversion using a measure of subjective risk-taking, rather than measures derived from abstract gambles. Controls related to financial knowledge and resources also explain the gender difference. The residual effect of the male gender on the conditional equity share, after all appropriate controls, is 3 percentage points and statistically significant. The effect on stock market participation on the other hand is close to zero or negative, so men contribute more to the nonparticipation puzzle conditional on covariates. The gender difference mainly works through women's higher risk aversion, which we find extends to finance professionals and wealthy private banking customers.

Suggested Citation

  • Halko, Marja-Liisa & Kaustia, Markku & Alanko, Elias, 2012. "The gender effect in risky asset holdings," Journal of Economic Behavior & Organization, Elsevier, vol. 83(1), pages 66-81.
    • Handle: RePEc:eee:jeborg:v:83:y:2012:i:1:p:66-81
    DOI: 10.1016/j.jebo.2011.06.011
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    More about this item

    Keywords

    Risk preferences; Portfolio choice; Gender difference;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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