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Gender Differences in Risk Preferences: An Empirical Study using Attitudinal and Behavioral Specifications of Risk Aversion

In: Gender in the Labor Market

Author

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  • Jyoti Rai
  • Jean Kimmel

Abstract

Do women exhibit greater financial risk aversion than men? We answer this question using attitudinal and behavioral specifications of risk aversion drawn from the 2010 Survey of Consumer Finances (SCF). To approximate attitudinal specification of risk aversion, we use individuals’ self-reported financial risk tolerance. We use individuals’ relative risk aversion, that is, the effect of wealth on the proportion of assets categorized as risky as behavioral specification of risk aversion. We find that while women display greater attitudinal risk aversion, gender difference in behavioral risk aversion depends upon individuals’ marital status and role in household finances. Single women exhibit greater behavioral risk aversion compared to single men. However, this gender difference does not exist when we compare behavioral risk aversion of married women and men in charge of household finances.

Suggested Citation

  • Jyoti Rai & Jean Kimmel, 2015. "Gender Differences in Risk Preferences: An Empirical Study using Attitudinal and Behavioral Specifications of Risk Aversion," Research in Labor Economics, in: Gender in the Labor Market, volume 42, pages 61-91, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:rleczz:s0147-912120150000042002
    DOI: 10.1108/S0147-912120150000042002
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    Citations

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    Cited by:

    1. Das, Tirthatanmoy & Polachek, Solomon, 2017. "Micro Foundations of Earnings Differences," IZA Discussion Papers 10922, Institute of Labor Economics (IZA).
    2. Concetta Castiglione & Davide Infante & Janna Smirnova, 2022. "Do female managers perform better? Evidence from Italian manufacturing firms," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 2194-2209, April.
    3. S. Ananda & Raghavendra Prasanna Kumar & Tamanna Dalwai, 2024. "Impact of financial literacy on savings behavior: the moderation role of risk aversion and financial confidence," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(3), pages 843-854, September.
    4. Anbar, Adem & Eker, Melek, 2019. "The Effect of Sociodemographic Variables and Love of Money on Financial Risk Tolerance of Bankers," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 10(4), pages 855-866, July.
    5. Charles Stephen Tundui & Christopher Shiganza, 2021. "Determinants of entrepreneurial behaviour in the public sector in Tanzania: a case of water services provision," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 11(1), pages 189-199, December.

    More about this item

    Keywords

    Gender differences; attitudinal risk aversion; behavioral risk aversion; relative risk aversion; household finances; D03; G02; G11; J1;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • J1 - Labor and Demographic Economics - - Demographic Economics

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