Event Women in EF

Agnieszka Tymula on gender differences in risk attitudes

Agnieszka Tymula (University of Sydney) presents her paper on “A new perspective on gender differences in risk attitudes.”

Studies have frequently found that women are more risk-averse than men (Eckel and Grossman, 2002; Agnew et al., 2008; Borghans et al., 2009). This gap can have far-reaching consequences, such as fewer female entrepreneurs, fewer women in managerial positions, suboptimal investment and saving strategies, and the gender pay gap. Although the gender difference in risk attitude has been replicated in many studies (we note that there are some exceptions), economists have struggled with how to use this finding to restore gender balance in economic decision-making. The main reason for this is that traditional economic models take risk preferences as static primitives, which makes it impossible to establish the underlying mechanism that leads to gender differences in risk attitudes. As such, we are now closer to devising a solution to address this risk attitude-based gender inequality. In this project, we take a different approach to risk attitude. Instead of treating it as a primitive, we use neuroeconomic and behavioral economic models in which risk attitude is determined by the reference point. We then evaluate whether there is a gender difference in the reference point, explaining the gender difference in risk aversion observed using the traditional approaches. The advantage of our approach is that it can explain the origins of the gender differences in risk attitudes and suggest policies that would reduce or eliminate these differences.