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Are Women More Risk Averse? A Sequel

Author

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  • Christos I. Giannikos

    (Bert Wasserman Department of Economics & Finance, Zicklin School of Business, Baruch College, The City University of New York, New York, NY 10010, USA)

  • Efstathia D. Korkou

    (Department of Business and Economics, School of Business and Information Systems, York College, The City University of New York, 94-20 Guy R. Brewer Blvd., Jamaica, NY 11451, USA)

Abstract

This paper reexamines the question of gender differences in financial relative risk aversion using updated methods and data. Specifically, the paper revisits the 1998 work “Are women more risk averse?” by Jianakoplos and Bernasek, suggests refinements in their model in relation to the database used, namely the U.S. Federal Reserve Board’s Survey of Consumer Finances (SCF), and performs new tests on the latest SCF from 2022. The suggested refinements pertain first to an enhanced computation of wealth, which includes additional categories of assets such as 401(k)s or other thrift savings accounts, and second to the more subtle handling and consideration of specific demographic data of the SCF respondents. Unlike the original study, which also included married couples, the new study focuses exclusively on single-headed (never-married) households. This eliminates ambiguity about the actual financial decision maker in households, enabling a clearer assessment of individual gendered behavior. Following the refinements, the new tests reveal a continuing pattern of decreasing relative risk aversion; however, contrary to the 1998 findings, there is no significant gender difference in financial relative risk aversion in 2022. This study also documents that education levels strongly influence risk-taking: single women with higher education levels are more likely to hold risky assets, while for men, higher education correlates with less risk-taking. The paper concludes by informing policymakers and financial educators so as to further tailor their strategies for promoting gender equality in financial decision-making.

Suggested Citation

  • Christos I. Giannikos & Efstathia D. Korkou, 2025. "Are Women More Risk Averse? A Sequel," Risks, MDPI, vol. 13(1), pages 1-15, January.
    • Handle: RePEc:gam:jrisks:v:13:y:2025:i:1:p:12-:d:1567437
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    References listed on IDEAS

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    1. Fisher, Patti J. & Yao, Rui, 2017. "Gender differences in financial risk tolerance," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 191-202.
    2. 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.
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