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Does knowledge of finance mitigate the gender difference in financial risk-aversion?

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  • Hibbert, Ann Marie
  • Lawrence, Edward R.
  • Prakash, Arun J.

Abstract

We investigate the gender difference in financial risk aversion using a survey of finance professors from universities across the United States. We compare their actual portfolio allocations to that of respondents in the Federal Reserve's Survey of Consumer Finances (SCF). We find that among highly educated individuals, women are significantly more risk averse than men. However, we find that when men and women have both attained a high level of financial education, they are equally likely to invest a significant portion of their portfolio in risky assets, suggesting that financial education mitigates the gender difference in financial risk aversion.

Suggested Citation

  • Hibbert, Ann Marie & Lawrence, Edward R. & Prakash, Arun J., 2013. "Does knowledge of finance mitigate the gender difference in financial risk-aversion?," Global Finance Journal, Elsevier, vol. 24(2), pages 140-152.
  • Handle: RePEc:eee:glofin:v:24:y:2013:i:2:p:140-152
    DOI: 10.1016/j.gfj.2013.07.002
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    Cited by:

    1. Lonkani, Ravi, 2019. "Gender differences and managerial earnings forecast bias: Are female executives less overconfident than male executives?," Emerging Markets Review, Elsevier, vol. 38(C), pages 18-34.
    2. Paul McGuinness & Kevin Lam & João Vieito, 2015. "Gender and other major board characteristics in China: Explaining corporate dividend policy and governance," Asia Pacific Journal of Management, Springer, vol. 32(4), pages 989-1038, December.
    3. Paul B. McGuinness, 2018. "IPO Firm Performance and Its Link with Board Officer Gender, Family-Ties and Other Demographics," Journal of Business Ethics, Springer, vol. 152(2), pages 499-521, October.
    4. Anbar, Adem & Eker, Melek, 2019. "The Effect of Sociodemographic Variables and Love of Money on Financial Risk Tolerance of Bankers," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 10(4), pages 855-866, July.
    5. Bjuggren, Per-Olof & Nordström, Louise & Palmberg, Johanna, 2015. "Efficiency of Female Leaders in Family and Non-Family Firms," Ratio Working Papers 259, The Ratio Institute.
    6. Marinelli, Nicoletta & Mazzoli, Camilla & Palmucci, Fabrizio, 2017. "How does gender really affect investment behavior?," Economics Letters, Elsevier, vol. 151(C), pages 58-61.

    More about this item

    Keywords

    Risk aversion; Gender bias; Behavioral finance; Financial education;

    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

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