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Are Women Really More Risk-Averse than Men?

  • Julie A. Nelson

While a substantial literature in economics and finance has concluded that women are more risk averse than men, this conclusion merits reconsideration. Drawing on literatures in statistics and cognitive science, this essay discusses the important difference between drawing conclusions based on statistical inference, which concerns aggregates such as mean scores, and generalization, which posits characteristics of individuals classified into kinds. To supplement findings of statistical significance, quantitative measures of substantive difference (Cohen's d) and overlap (the Index of Similarity) are computed from the data on men, women, and risk used in 28 published articles. The results are considerably more mixed and overlapping than might be expected. Paying attention to empirical evidence that challenges subjective cultural beliefs about sex and risk has implications for labor economics, finance, and the economics of climate change.

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Paper provided by GDAE, Tufts University in its series GDAE Working Papers with number 12-05.

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Date of creation: Sep 2012
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Handle: RePEc:dae:daepap:12-05
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  1. Lex Borghans & Bart H.H. Golsteyn & James J. Heckman & Huub Meijers, 2009. "Gender Differences in Risk Aversion and Ambiguity," Working Papers 200903, Geary Institute, University College Dublin.
  2. Powell, Melanie & Ansic, David, 1997. "Gender differences in risk behaviour in financial decision-making: An experimental analysis," Journal of Economic Psychology, Elsevier, vol. 18(6), pages 605-628, November.
  3. Hartog, Joop & Ferrer-i-Carbonell, Ada & Jonker, Nicole, 2002. "Linking Measured Risk Aversion to Individual Characteristics," Kyklos, Wiley Blackwell, vol. 55(1), pages 3-26.
  4. Adrian Bruhin & Helga Fehr-Duda & Thomas Epper, 2007. "Risk and Rationality: Uncovering Heterogeneity in Probability Distortion," SOI - Working Papers 0705, Socioeconomic Institute - University of Zurich, revised Jul 2007.
  5. Borghans, Lex & Golsteyn, Bart H.H. & Heckman, James J. & Meijers, Huub, 2009. "Gender Differences in Risk Aversion and Ambiguity Aversion," IZA Discussion Papers 3985, Institute for the Study of Labor (IZA).
  6. Alison L. Booth & Patrick Nolen, 2009. "Gender Differences in Risk Behaviour: Does Nurture Matter?," Economics Discussion Papers 672, University of Essex, Department of Economics.
  7. Nelson, Julie A., 1992. "Gender, Metaphor, and the Definition of Economics," Economics and Philosophy, Cambridge University Press, vol. 8(01), pages 103-125, April.
  8. Ziliak, Stephen T. & McCloskey, Deirdre N., 2004. "Size matters: the standard error of regressions in the American Economic Review," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 33(5), pages 527-546, November.
  9. Lindquist, Gabriella Sjögren & Säve-Söderbergh, Jenny, 2011. ""Girls will be Girls", especially among Boys: Risk-taking in the "Daily Double" on Jeopardy," Economics Letters, Elsevier, vol. 112(2), pages 158-160, August.
  10. Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2010. "Risk and Time Preferences: Linking Experimental and Household Survey Data from Vietnam," American Economic Review, American Economic Association, vol. 100(1), pages 557-71, March.
  11. Catherine C. Eckel & Philip J. Grossman, 2002. "Sex Differences and Statistical Stereotyping in Attitudes Toward Financial Risk," Monash Economics Working Papers archive-03, Monash University, Department of Economics.
  12. Dohmen Thomas & Falk Armin & Huffman David & Sunde Uwe & Schupp Jürgen & Wagner Gert G., 2009. "Individual Risk Attitudes: Measurement, Determinants and Behavioral Consequences," Research Memorandum 039, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  13. LINDA McDOWELL, 2010. "Capital Culture Revisited: Sex, Testosterone and the City," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 34(3), pages 652-658, 09.
  14. Richard S. J. Tol, 2010. "The Economic Impact of Climate Change," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 11(s1), pages 13-37, 05.
  15. Meier-Pesti, Katja & Penz, Elfriede, 2008. "Sex or gender? Expanding the sex-based view by introducing masculinity and femininity as predictors of financial risk taking," Journal of Economic Psychology, Elsevier, vol. 29(2), pages 180-196, April.
  16. Randall, Alan, 2009. "We Already Have Risk Management - Do We Really Need the Precautionary Principle?," International Review of Environmental and Resource Economics, now publishers, vol. 3(1), pages 39-74, August.
  17. Nelson, Julie A., 2009. "Between a rock and a soft place: Ecological and feminist economics in policy debates," Ecological Economics, Elsevier, vol. 69(1), pages 1-8, November.
  18. Uri Gneezy & Kenneth L. Leonard & John A. List, 2008. "Gender Differences in Competition: Evidence from a Matrilineal and a Patriarchal Society," NBER Working Papers 13727, National Bureau of Economic Research, Inc.
  19. Beckmann, Daniela & Menkhoff, Lukas, 2008. "Will Women Be Women? Analyzing the Gender Difference among Financial Experts," Hannover Economic Papers (HEP) dp-391, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  20. Barsky, Robert B, et al, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 537-79, May.
  21. Jane Miller & Yana van der Meulen Rodgers, 2008. "Economic importance and statistical significance: Guidelines for communicating empirical research," Feminist Economics, Taylor & Francis Journals, vol. 14(2), pages 117-149.
  22. Kimmo Eriksson & Brent Simpson, 2010. "Emotional reactions to losing explain gender differences in entering a risky lottery," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 5(3), pages 159-163, June.
  23. Catherine C. Eckel & Philip J. Grossman, 2008. "Forecasting Risk Attitudes: An Experimental Study Using Actual and Forecast Gamble Choices," Monash Economics Working Papers archive-01, Monash University, Department of Economics.
  24. Sunden, Annika E & Surette, Brian J, 1998. "Gender Differences in the Allocation of Assets in Retirement Savings Plans," American Economic Review, American Economic Association, vol. 88(2), pages 207-11, May.
  25. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
  26. Helga Fehr-Duda & Manuele Gennaro & Renate Schubert, 2006. "Gender, Financial Risk, and Probability Weights," Theory and Decision, Springer, vol. 60(2), pages 283-313, 05.
  27. Brad M. Barber & Terrance Odean, 2001. "Boys Will Be Boys: Gender, Overconfidence, And Common Stock Investment," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 261-292, February.
  28. Renate Schubert, 1999. "Financial Decision-Making: Are Women Really More Risk-Averse?," American Economic Review, American Economic Association, vol. 89(2), pages 381-385, May.
  29. Nelson, J.A., 2013. "Ethics and the economist: What climate change demands of us," Ecological Economics, Elsevier, vol. 85(C), pages 145-154.
  30. Stephen T. Ziliak & Deirdre N. McCloskey, 2004. "Size Matters: The Standard Error of Regressions in the American Economic Review," Econ Journal Watch, Econ Journal Watch, vol. 1(2), pages 331-358, August.
  31. Joseph Henrich & Steve J. Heine & Ara Norenzayan, 2010. "The Weirdest People in the World?," Working Paper Series of the German Council for Social and Economic Data 139, German Council for Social and Economic Data (RatSWD).
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