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Estimation And Impact Of Gender Differences In Risk Tolerance

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  • URVI NEELAKANTAN

Abstract

This paper provides numerical estimates of the distributions of risk tolerance for men and women. A simple model of individual portfolio choice is calibrated to data on Individual Retirement Accounts from the Health and Retirement Study to obtain the estimates. Results show that women tend to be less risk‐tolerant than men. The estimates are then used to measure the impact of risk tolerance on wealth accumulation. Simulations show that the difference in risk tolerance can account for around 10% of the gender difference in accumulated wealth. (JEL J16, G11, D81)

Suggested Citation

  • Urvi Neelakantan, 2010. "Estimation And Impact Of Gender Differences In Risk Tolerance," Economic Inquiry, Western Economic Association International, vol. 48(1), pages 228-233, January.
    • Handle: RePEc:bla:ecinqu:v:48:y:2010:i:1:p:228-233
    DOI: 10.1111/j.1465-7295.2009.00251.x
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • 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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