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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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    More about this item

    Keywords

    Risk aversion; Gender bias; Behavioral finance; Financial education;
    All these keywords.

    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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