Are Women More Risk Adverse Than Men

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GLOBAL DEVELOPMENT AND ENVIRONMENT INSTITUTE WORKING PAPER NO. 12-05 Are Women Really More Risk-Averse than Men? Julie A. Nelson September 2012 This research was funded by a grant from the Institute for New Thinking in Economics (INET) and is also available as INET Research Note #12. An earlier portion of this work was presented at the conferences of the International Society for Ecological Economics, Rio de Janeiro, Brazil June 16-19 2012 and the International Association for Feminist Economics, Barcelona, Spain, June 27-29, 2012. Tufts University Medford MA 02155, USA http://ase.tufts.edu/gdae View the complete list of working papers on our website: http://www.ase.tufts.edu/gdae/publications/working_papers/index.html GDAE Working Paper No. 12-05: Are Women Really More Risk-Averse than Men? Abstract: While a substantial literature in economics and finance has concluded that women are more risk averse than men, this conclusion merits reconsideration. Drawing on literatures in statistics and cognitive science, this essay discusses the important difference between drawing conclusions based on statistical inference, which concerns aggregates such as mean scores, and generalization, which posits characteristics of individuals classified into kinds. To supplement findings of statistical significance, quantitative measures of substantive difference (Cohen's d) and overlap (the Index of Similarity) are computed from the data on men, women, and risk used in 28 published articles. The results are considerably more mixed and overlapping than might be expected. Paying attention to empirical evidence that challenges subjective cultural beliefs about sex and risk has implications for labor economics, finance, and the economics of climate change. 1 GDAE Working Paper No. 12-05: Are Women Really More Risk-Averse than Men? Are Women Really More

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