Researcher Questions Whether Women More Risk-Averse Than Men

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While previous academic research has shown women to be less willing to engage in risk than men in situations like gambling, a new economics paper released this week finds men can be just as risk-averse, if not more.

Julie Nelson, chairwoman of the economics department at University of Massachusetts-Boston, wrote "Are Women Really More Risk-Averse Than Men?"as a working paper this week.

"The paper finds a lot of the economics and finance research in behavioral differences between men and women is vastly exaggerated," Nelson said.

Nelson and a research assistant reviewed more than 24 published articles about the subject, many of which studied men and women's gambling habits and often concluded that women were less willing to gamble.

"My paper goes over the literature and says 'not so fast,'" she said.

Nelson often found small differences in the averages of the two genders that measured how willing they were to take risks.

"Academic articles hide that there is a lot of overlap between men and women," Nelson said.

Nelson pointed out that it should be difficult to generalize on risk just from studies about lottery-like games, upon which is what much of the research is based.

"That's easy to do with a bunch of undergraduates in a psych lab," she said of much of the research methodology about the subject.

Either there are problems with studies themselves or some people over-interpreted the results, Nelson said.

Kimmo Eriksson, a Swedish scholar, co-authored a paper called "Emotional reactions to losing explain gender differences in entering a risky lottery" in 2010. However, after reading Nelson's paper, he acknowledged in a blog post his error in citing a previous risk-related gender study.

Eriksson and his co-author had written that "females' lower risk preferences and less risky behavior is robust across a variety of contexts." However, the previous study he cited concluded that the majority, 60 percent, of the research subjects supported "the idea of greater risk taking on the part of males," and, "a sizable minority," 40 percent, were either negative or close to zero.

A loose translation of his blog post included, "Julie Nelson is of course right that robustness was too strong a word."

As an economics professor, Nelson pointed out that generalizations based upon gender about risk-aversion can lead to broader cultural bias in financial decision-making and the workplace. She argued out that the cultural perceptions of what is masculine and feminine may be more influential on one's risk aversion than a biological difference.

"Could the financial crisis that began in 2008 be attributed, at least in part, to issues of sex and gender?" she wrote in the paper. "In the wake of the crisis, several commentators asked whether women leaders would have prevented it, or whether it would have happened 'if Lehman Brothers had been Lehman Sisters'. The evidence reviewed in this essay suggests, however, that the biological sex of the financial decision-makers or regulators is likely not the most important factor."