Cognitive Skills, Gender and Risk Preferences
In this paper we utilise data from a unique new birth‐cohort study to see how the risk preferences of young people are affected by cognitive skills and gender. We find that cognitive ability (measured by the percentile ranking for university entrance at age 18) has no effect on risk preferences measured at age 20. This is in contrast to experimental studies that use IQ measures to proxy cognitive skills. However we do find that gender matters. While young women are significantly more likely than young men to assess themselves as being prepared to take risks, women choose to invest significantly less when they are confronted with a clearly specified investment decision based on hypothetical lottery winnings. This difference between the impact of gender on risk attitudes and the hypothetical lottery investment suggests that impatience and framing affect young women and men differently.
|Date of creation:||Nov 2012|
|Date of revision:|
|Publication status:||published in: Economic Record, 2013, 89 (284),19-30|
|Contact details of provider:|| Postal: |
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Cobb-Clark, Deborah A. & Ryan, Chris & Sartbayeva, Anastasia, 2009.
"Taking Chances: The Effect of Growing Up on Welfare on the Risky Behavior of Young People,"
IZA Discussion Papers
4095, Institute for the Study of Labor (IZA).
- Deborah A. Cobb-Clark & Chris Ryan & Ana Sartbayeva, 2009. "Taking Chances: The Effect of Growing Up on Welfare on the Risky Behaviour of Young People," CEPR Discussion Papers 604, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Donkers, A.C.D. & Melenberg, B. & van Soest, A.H.O., 1999.
"Estimating Risk Attitudes Using Lotteries; A Large Sample Approach,"
1999-12, Tilburg University, Center for Economic Research.
- Donkers, Bas & Melenberg, Bertrand & Van Soest, Arthur, 2001. " Estimating Risk Attitudes Using Lotteries: A Large Sample Approach," Journal of Risk and Uncertainty, Springer, vol. 22(2), pages 165-95, March.
- Steffen Andersen & Glenn W. Harrison & Morten I. Lau & E. Elisabet Rutström, 2008. "Eliciting Risk and Time Preferences," Econometrica, Econometric Society, vol. 76(3), pages 583-618, 05.
- Juan D. Barón & Deborah Cobb-Clark, .
"Are Young People's Educational Outcomes Linked to their Sense of Control?,"
Borradores de Economia
599, Banco de la Republica de Colombia.
- Juan D. Baron & Deborah Cobb-Clark, 2010. "Are Young People's Educational Outcomes Linked to Their Sense of Control?," Melbourne Institute Working Paper Series wp2010n05, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Juan D. Barón & Deborah Cobb-Clark, 2010. "Are Young People's Educational Outcomes Linked to their Sense of Control?," BORRADORES DE ECONOMIA 006978, BANCO DE LA REPÚBLICA.
- Barón, Juan D. & Cobb-Clark, Deborah A., 2010. "Are Young People's Educational Outcomes Linked to their Sense of Control?," IZA Discussion Papers 4907, Institute for the Study of Labor (IZA).
- Buly A Cardak & Chris Ryan, 2006.
"Why are high ability individuals from poor backgrounds under-represented at university?,"
2006.04, School of Economics, La Trobe University.
- Buly A Cardak & Chris Ryan, 2006. "Why are high ability individuals from poor backgrounds under-represented at university?," Working Papers 2006.04, School of Economics, La Trobe University.
- Eckel, Catherine C. & Grossman, Philip J., 2008.
"Men, Women and Risk Aversion: Experimental Evidence,"
Handbook of Experimental Economics Results,
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp6997. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If references are entirely missing, you can add them using this form.