Safe Options Induce Gender Differences in Risk Attitudes

28 Pages Posted: 5 Jun 2017

See all articles by Paolo Crosetto

Paolo Crosetto

Grenoble Applied Economics Laboratory

Antonio Filippin

Università degli Studi di Milano; IZA Institute of Labor Economics

Abstract

Gender differences in risk attitudes are frequently observed, although recent literature has shown that they are context dependent rather than ubiquitous. In this paper we try to rationalize the heterogeneity of results investigating experimentally whether the presence of a safe option among the set of alternatives explains why females are more risk averse than males. We manipulate three widely used risk elicitation methods finding that the availability of a safe option causally affects risk attitudes. The presence of a riskless alternative does not entirely explain the gender gap but it has a significant effect in triggering or magnifying (when already present) such differences. Despite the pronounced instability that usually characterizes the measurement of risk preferences, we show estimating a structural model that the effect of a safe option is remarkably stable across tasks. This paper constitutes the first successful attempt to shed light on the determinants of gender differences in risk attitudes.

Keywords: gender differences, risk attitudes, experiment, safe option

JEL Classification: C81, C91, D81

Suggested Citation

Crosetto, Paolo and Filippin, Antonio, Safe Options Induce Gender Differences in Risk Attitudes. IZA Discussion Paper No. 10793, Available at SSRN: https://ssrn.com/abstract=2979941 or http://dx.doi.org/10.2139/ssrn.2979941

Paolo Crosetto (Contact Author)

Grenoble Applied Economics Laboratory ( email )

BP 47
38040 Grenoble
France

Antonio Filippin

Università degli Studi di Milano ( email )

Milan, 20122
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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