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Do Women Prefer Pink? The Effect of a Gender Stereotypical Stock Portfolio on Investing Decisions

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  • Henriëtte Prast
  • Mariacristina Rossi
  • Costanza Torricelli
  • Dario Sansone

Abstract

We investigate whether lack of familiarity with the companies in the stock market index may contribute to a gender gap in stock market participation and risk taking. We consider the Netherlands because recent reforms have reduced the generosity of mandatory pension and social security arrangements and created the need for many employees to decide on how to allocate (pension) savings. Moreover, the gender gap in pensions in the Nether- lands is above that of the OECD average. We construct a «pink» portfolio with stocks that are supposed to be more familiar to women (based on ads in widely read women magazines) and a «blue» one with stocks from the market index (AEX). We then ask members of the CentERpanel how they would allocate a certain amount of pension wealth between govern- ment bonds and a stock portfolio, whereby half of respondents, randomly selected, are given the pink portfolio and half the blue one as an alternative to bonds. Based on a set of limited dependent variable models, we find that familiarity is correlated to decision time for women, but it affects risk-taking only for women over 60. We do find a strong response order effect on risk taking, which moreover is larger for women than for men, and interpret the latter as reflecting a gender gap in confidence.

Suggested Citation

  • Henriëtte Prast & Mariacristina Rossi & Costanza Torricelli & Dario Sansone, 2015. "Do Women Prefer Pink? The Effect of a Gender Stereotypical Stock Portfolio on Investing Decisions," Politica economica, Società editrice il Mulino, issue 3, pages 377-420.
  • Handle: RePEc:mul:je8794:doi:10.1429/81935:y:2015:i:3:p:377-420
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    References listed on IDEAS

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    1. Bertocchi, Graziella & Brunetti, Marianna & Torricelli, Costanza, 2011. "Marriage and other risky assets: A portfolio approach," Journal of Banking & Finance, Elsevier, vol. 35(11), pages 2902-2915, November.
    2. Heath, Chip & Tversky, Amos, 1991. "Preference and Belief: Ambiguity and Competence in Choice under Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 4(1), pages 5-28, January.
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    Cited by:

    1. Maria Cristina Rossi & Dario Sansone & Costanza Torricelli & Arthur van Soest, 2018. "Household Preferences for Socially Responsible Investments," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 0066, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    2. Cecilia Boggio & Elsa Fornero & Henriette Prast & Jose Sanders, 2014. "Seven Ways to Knit Your Portfolio: Is Investor Communication Neutral?," CeRP Working Papers 140, Center for Research on Pensions and Welfare Policies, Turin (Italy).
    3. Prast, Henriette & Sanders, José & Boggio, C., 2017. "Seven ways to knit your portfolio: Is the language of investor communication gender neutral?," Other publications TiSEM b477bb2d-f71c-4b9b-ab9e-b, Tilburg University, School of Economics and Management.
    4. Maria Cristina Rossi & Dario Sansone & Costanza Torricelli & Arthur van Soest, 2018. "Household Preferences for Socially Responsible Investments," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 18021, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".

    More about this item

    Keywords

    gender differences; portfolio choice; familiarity.;

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • M30 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - General

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