Are Men More Optimistic?

Abstract:     
Men are strikingly more optimistic about the future performance of key economic and financial indicators than women. We report surprisingly strong and highly significant gender differences in consumer confidence data of seventeen out of eighteen countries, including the US. We confirm these findings using data from US and European Gallup opinion polls. This gender difference is present in key indicators such as economic growth, interest rates, inflation and future stock market performance and persists after we control for income, employment, wealth, education and marital status. Our results hold regardless whether we consider questions about respondent's personal future economic situation or the general state of the economy. This suggests that the optimism we document in this study is different from the well-documented overconfidence phenomenon, as it extends beyond the personal influence sphere of respondents. We also document significant gender differences in perceived stock market risk. Thus, we show that not only differences in risk aversion but also differences in optimism and perceived risk may explain why women hold on average less risky portfolios than men.

Keywords: Optimism, Pessimism, Gender Difference, Consumer Confidence, Economic Indicators, Risk Aversion

JEL Classifications: D1, D8, D9, G11, Z1

Working Paper Series