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The gender effect in risky asset holdings

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

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

    Volume (Year): 83 (2012)
    Issue (Month): 1 ()
    Pages: 66-81

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    Handle: RePEc:eee:jeborg:v:83:y:2012:i:1:p:66-81

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    Web page: http://www.elsevier.com/locate/jebo

    Related research

    Keywords: Risk preferences; Portfolio choice; Gender difference;

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    Cited by:
    1. Almenberg, Johan & Dreber, Anna, 2011. "Gender, Stock Market Participation and Financial Literacy," Working Paper Series in Economics and Finance 737, Stockholm School of Economics, revised 16 Aug 2011.
    2. Dreber, Anna & Rand, David G. & Wernerfelt, Nils & Garcia, Justin R. & Lum, J. Koji & Zeckhauser, Richard, 2011. "The Dopamine Receptor D4 Gene (DRD4) and Self-Reported Risk Taking in the Economic Domain," Working Paper Series rwp11-042, Harvard University, John F. Kennedy School of Government.

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