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Gender Differences in Risk Aversion and Ambiguity Aversion

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Author Info

  • Borghans, Lex

    ()
    (Maastricht University)

  • Golsteyn, Bart H.H.

    ()
    (Maastricht University)

  • Heckman, James J.

    ()
    (University of Chicago)

  • Meijers, Huub

    ()
    (Maastricht University)

Abstract

This paper demonstrates gender differences in risk aversion and ambiguity aversion. It also contributes to a growing literature relating economic preference parameters to psychological measures by asking whether variations in preference parameters among persons, and in particular across genders, can be accounted for by differences in personality traits and traits of cognition. Women are more risk averse than men. Over an initial range, women require no further compensation for the introduction of ambiguity but men do. At greater levels of ambiguity, women have the same marginal distaste for increased ambiguity as men. Psychological variables account for some of the interpersonal variation in risk aversion. They explain none of the differences in ambiguity.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3985.

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Length: 19 pages
Date of creation: Jan 2009
Date of revision:
Publication status: published in: Journal of the European Economic Association, 2009, 7(2-3), 649-658
Handle: RePEc:iza:izadps:dp3985

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Keywords: risk aversion; ambiguity aversion; gender;

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References

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  1. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2010. "Are Risk Aversion and Impatience Related to Cognitive Ability?," American Economic Review, American Economic Association, American Economic Association, vol. 100(3), pages 1238-60, June.
  2. Halevy, Yoram, 2005. "Ellsberg Revisited: an Experimental Study," Microeconomics.ca working papers, Vancouver School of Economics halevy-05-07-26-11-51-13, Vancouver School of Economics, revised 25 Feb 2014.
  3. Borghans, Lex & Duckworth, Angela Lee & Heckman, James J. & Weel, Bas ter, 2008. "The Economics and Psychology of Personality Traits," MERIT Working Papers 010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  4. David K. Backus & Bryan R. Routledge & Stanley E. Zin, 2005. "Exotic Preferences for Macroeconomists," NBER Chapters, in: NBER Macroeconomics Annual 2004, Volume 19, pages 319-414 National Bureau of Economic Research, Inc.
  5. Renate Schubert, 1999. "Financial Decision-Making: Are Women Really More Risk-Averse?," American Economic Review, American Economic Association, American Economic Association, vol. 89(2), pages 381-385, May.
  6. Powell, Melanie & Ansic, David, 1997. "Gender differences in risk behaviour in financial decision-making: An experimental analysis," Journal of Economic Psychology, Elsevier, Elsevier, vol. 18(6), pages 605-628, November.
  7. Julie R. Agnew & Lisa R. Anderson & Jeffrey R. Gerlach & Lisa R. Szykman, 2008. "Who Chooses Annuities? An Experimental Investigation of the Role of Gender, Framing, and Defaults," American Economic Review, American Economic Association, American Economic Association, vol. 98(2), pages 418-22, May.
  8. Hartog, Joop & Ferrer-i-Carbonell, Ada & Jonker, Nicole, 2002. "Linking Measured Risk Aversion to Individual Characteristics," Kyklos, Wiley Blackwell, Wiley Blackwell, vol. 55(1), pages 3-26.
  9. Daniel J. Benjamin & Sebastian A. Brown & Jesse M. Shapiro, 2006. "Who is “Behavioral”? Cognitive Ability and Anomalous Preferences," Levine's Working Paper Archive 122247000000001334, David K. Levine.
  10. Lars Peter Hansen, 2007. "Beliefs, Doubts and Learning: Valuing Macroeconomic Risk," American Economic Review, American Economic Association, American Economic Association, vol. 97(2), pages 1-30, May.
  11. Lars Peter Hansen, 2007. "Beliefs, Doubts and Learning: Valuing Economic Risk," NBER Working Papers 12948, National Bureau of Economic Research, Inc.
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  1. The referendum, & risk attitudes
    by chris dillow in Stumbling and Mumbling on 2014-09-12 12:27:19
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