IDEAS home Printed from https://ideas.repec.org/p/lis/lwswps/15.html
   My bibliography  Save this paper

Financial risk taking, gender and social identity - Evidence from national surveys of household finance

Author

Listed:
  • Nataliya Barasinska
  • Dorothea Sch fer

Abstract

Based on household survey data, we compare men's and women's willingness to take investment risk in four European countries, each with a distinct level of gender equality. Our analysis reveals three main results. Firstly, in Italy, the country with the lowest degree of gender equality in our sample, women are less likely to take investment risk as men with the same risk preferences. Social norms seem to explain this result as further investigation of the Italian case confirms. Secondly, in the three countries with a comparatively high degree of gender equality, Austria, The Netherlands and Spain, women self-select into the group of risk-taking investors and are therefore, on average, as risk tolerant as their male counterparts. Thirdly, the risk preferences of both spouses have a significant effect on the couple's risk-taking. Therefore, risk taking within a couple may be gender-independent and be the result of a compromise.

Suggested Citation

  • Nataliya Barasinska & Dorothea Sch fer, 2013. "Financial risk taking, gender and social identity - Evidence from national surveys of household finance," LWS Working papers 15, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:lwswps:15
    as

    Download full text from publisher

    File URL: http://www.lisdatacenter.org/wps/lwswps/15.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Christelis, Dimitris & Georgarakos, Dimitris & Haliassos, Michael, 2011. "Stockholding: Participation, location, and spillovers," Journal of Banking & Finance, Elsevier, vol. 35(8), pages 1918-1930, August.
    2. Booth, Alison & Nolen, Patrick, 2012. "Choosing to compete: How different are girls and boys?," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 542-555.
    3. Marco Caliendo & Alexander Kritikos, 2010. "Start-ups by the unemployed: characteristics, survival and direct employment effects," Small Business Economics, Springer, vol. 35(1), pages 71-92, July.
    4. Paola Giuliano, 2007. "Living Arrangements in Western Europe: Does Cultural Origin Matter?," Journal of the European Economic Association, MIT Press, vol. 5(5), pages 927-952, September.
    5. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, June.
    6. Luigi Guiso & Michael Haliassos & Tullio Jappelli, 2003. "Household stockholding in Europe: where do we stand and where do we go? [‘Limited market participation and volatility of assets prices’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 18(36), pages 123-170.
    7. Raquel Fernández & Alessandra Fogli, 2006. "Fertility: The Role of Culture and Family Experience," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 552-561, 04-05.
    8. Alberto F. Alesina & Francesca Lotti & Paolo Emilio Mistrulli, 2013. "Do Women Pay More For Credit? Evidence From Italy," Journal of the European Economic Association, European Economic Association, vol. 11, pages 45-66, January.
    9. Dimitris Christelis & Dimitris Georgarakos & Michael Haliassos, 2013. "Differences in Portfolios across Countries: Economic Environment versus Household Characteristics," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 220-236, March.
    10. Olympia Bover, 2008. "The Spanish Survey of Household Finances (EFF): description and methods of the 2005 wave," Occasional Papers 0803, Banco de España.
    11. Cárdenas, Juan-Camilo & Dreber, Anna & von Essen, Emma & Ranehill, Eva, 2012. "Gender differences in competitiveness and risk taking: Comparing children in Colombia and Sweden," Journal of Economic Behavior & Organization, Elsevier, vol. 83(1), pages 11-23.
    12. Lindquist, Gabriella Sjögren & Säve-Söderbergh, Jenny, 2011. ""Girls will be Girls", especially among Boys: Risk-taking in the "Daily Double" on Jeopardy," Economics Letters, Elsevier, vol. 112(2), pages 158-160, August.
    13. Barasinska, Nataliya & Schäfer, Dorothea, 2013. "Is the willingness to take financial risk a sex-linked trait? Evidence from national surveys of household finance," Discussion Papers 05/2013, Deutsche Bundesbank.
    14. Berger, Allen N. & Kick, Thomas & Schaeck, Klaus, 2014. "Executive board composition and bank risk taking," Journal of Corporate Finance, Elsevier, vol. 28(C), pages 48-65.
    15. Thorsten Beck & Patrick Behr & Andre Guettler, 2013. "Gender and Banking: Are Women Better Loan Officers?," Review of Finance, European Finance Association, vol. 17(4), pages 1279-1321.
    16. Eva M. Sierminska & Joachim R. Frick & Markus M. Grabka, 2010. "Examining the gender wealth gap," Oxford Economic Papers, Oxford University Press, vol. 62(4), pages 669-690, October.
    17. Hackethal, Andreas & Haliassos, Michael & Jappelli, Tullio, 2012. "Financial advisors: A case of babysitters?," Journal of Banking & Finance, Elsevier, vol. 36(2), pages 509-524.
    18. Catherine C. Eckel & Philip J. Grossman, 2008. "Forecasting Risk Attitudes: An Experimental Study Using Actual and Forecast Gamble Choices," Monash Economics Working Papers archive-01, Monash University, Department of Economics.
    19. P J A van Els & W A van den End & M C J van Rooij, 2005. "Financial behaviour of Dutch households: analysis of the DNB Household Survey 2003," BIS Papers chapters, in: Bank for International Settlements (ed.), Investigating the relationship between the financial and real economy, volume 22, pages 21-39, Bank for International Settlements.
    20. Stanley M. Atkinson & Samantha Boyce Baird & Melissa B. Frye, 2003. "Do Female Mutual Fund Managers Manage Differently?," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 26(1), pages 1-18, March.
    21. Uri Gneezy & Kenneth L. Leonard & John A. List, 2009. "Gender Differences in Competition: Evidence From a Matrilineal and a Patriarchal Society," Econometrica, Econometric Society, vol. 77(5), pages 1637-1664, September.
    22. Alberto Alesina & Paola Giuliano, 2010. "The power of the family," Journal of Economic Growth, Springer, vol. 15(2), pages 93-125, June.
    23. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 715-753.
    24. Raj Chetty & Adam Szeidl, 2007. "Consumption Commitments and Risk Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 831-877.
    25. Quang Nguyen, 2011. "Does nurture matter: Theory and experimental investigation on the effect of working environment on risk and time preferences," Journal of Risk and Uncertainty, Springer, vol. 43(3), pages 245-270, December.
    26. Jianakoplos, Nancy Ammon & Bernasek, Alexandra, 1998. "Are Women More Risk Averse?," Economic Inquiry, Western Economic Association International, vol. 36(4), pages 620-630, October.
    27. Daniela Beckmann & Lukas Menkhoff, 2008. "Will Women Be Women? Analyzing the Gender Difference among Financial Experts," Kyklos, Wiley Blackwell, vol. 61(3), pages 364-384, August.
    28. Haliassos, Michael & Bertaut, Carol C, 1995. "Why Do So Few Hold Stocks?," Economic Journal, Royal Economic Society, vol. 105(432), pages 1110-1129, September.
    29. Luigi Guiso & Michael Haliassos & Tullio Jappelli (ed.), 2003. "Stockholding in Europe," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-50267-3, December.
    30. Renate Schubert, 1999. "Financial Decision-Making: Are Women Really More Risk-Averse?," American Economic Review, American Economic Association, vol. 89(2), pages 381-385, May.
    31. Friend, Irwin & Blume, Marshall E, 1975. "The Demand for Risky Assets," American Economic Review, American Economic Association, vol. 65(5), pages 900-922, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nataliya Barasinska & Dorothea Schäfer, 2013. "Is the Willingness to Take Financial Risk a Sex-Linked Trait?: Evidence from National Surveys of Household Finance," Discussion Papers of DIW Berlin 1278, DIW Berlin, German Institute for Economic Research.
    2. Nataliya Barasinska & Dorothea Schäfer, 2018. "Gender role asymmetry and stock market participation – evidence from four European household surveys," The European Journal of Finance, Taylor & Francis Journals, vol. 24(12), pages 1026-1046, August.
    3. Oleg Badunenko & Nataliya Barasinska & Dorothea Schäfer, 2009. "Risk Attitudes and Investment Decisions across European Countries: Are Women More Conservative Investors than Men?," SOEPpapers on Multidisciplinary Panel Data Research 224, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Drupp, Moritz A. & Khadjavi, Menusch & Riekhof, Marie-Catherine & Voss, Rudi, 2020. "Professional identity and the gender gap in risk-taking. Evidence from field experiments with scientists," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 418-432.
    5. repec:diw:diwfin:diwfin06010 is not listed on IDEAS
    6. Muriel Niederle, 2014. "Gender," NBER Working Papers 20788, National Bureau of Economic Research, Inc.
    7. Cueva, Carlos & Rustichini, Aldo, 2015. "Is financial instability male-driven? Gender and cognitive skills in experimental asset markets," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 330-344.
    8. Luik, Marc-André & Berlemann, Michael, 2014. "Institutional Reform and Depositors’ Portfolio Choice: Evidence from Censored Quantile Regressions," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100291, Verein für Socialpolitik / German Economic Association.
    9. Nelson, Julie A., 2012. "Are Women Really More Risk-Averse than Men?," Working Papers 179104, Tufts University, Global Development and Environment Institute.
    10. Sultan Saqar Oqaidan Alwahaibi, 2019. "Is Demographic Information Influence Risk Tolerance/Aversion in Investment Decision? Evidences from Literature Review," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9(1), pages 111-122, January.
    11. Czibor, Eszter & Claussen, Jörg & van Praag, Mirjam, 2019. "Women in a men’s world: Risk taking in an online card game community," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 62-89.
    12. Francisco Gomes & Michael Haliassos & Tarun Ramadorai, 2021. "Household Finance," Journal of Economic Literature, American Economic Association, vol. 59(3), pages 919-1000, September.
    13. Boschini, Anne & Dreber, Anna & von Essen, Emma & Muren, Astri & Ranehill, Eva, 2018. "Gender, risk preferences and willingness to compete in a random sample of the Swedish population," Working Paper Series 10/2018, Stockholm University, Swedish Institute for Social Research.
    14. Boschini, Anne & Dreber, Anna & von Essen, Emma & Muren, Astri & Ranehill, Eva, 2019. "Gender, risk preferences and willingness to compete in a random sample of the Swedish population✰," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).
    15. Bucher-Koenen, Tabea & Ziegelmeyer, Michael, 2011. "Who lost the most? Financial Literacy, Cognitive Abilities, and the Financial Crisis," MEA discussion paper series 11234, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    16. Kaustia, Markku & Conlin, Andrew & Luotonen, Niilo, 2023. "What drives stock market participation? The role of institutional, traditional, and behavioral factors," Journal of Banking & Finance, Elsevier, vol. 148(C).
    17. Julie A. Nelson, 2015. "Are Women Really More Risk-Averse Than Men? A Re-Analysis Of The Literature Using Expanded Methods," Journal of Economic Surveys, Wiley Blackwell, vol. 29(3), pages 566-585, July.
    18. Nicholas Apergis & Christos Bouras, 2023. "Household choices on investing in financial risky assets: Do national institutional factors have their own merit?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 405-420, January.
    19. Jetter, Michael & Walker, Jay K., 2018. "The gender of opponents: Explaining gender differences in performance and risk-taking?," European Economic Review, Elsevier, vol. 109(C), pages 238-256.
    20. José García-Montalvo & Marta Reynal-Querol, 2019. "Gender and Credit Risk: A View From the Loan Officer’s Desk," Working Papers 1076, Barcelona School of Economics.
    21. Agarwal, Sumit & Green, Richard & Rosenblatt, Eric & Yao, Vincent W. & Zhang, Jian, 2018. "Gender difference and intra-household economic power in mortgage signing order," Journal of Financial Intermediation, Elsevier, vol. 36(C), pages 86-100.

    More about this item

    Keywords

    Gender; Risk aversion; Financial behavior;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lis:lwswps:15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Piotr Paradowski (email available below). General contact details of provider: https://edirc.repec.org/data/lisprlu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.