Salience, Risky Choices and Gender

11 Pages Posted: 10 Mar 2012

See all articles by Alison L. Booth

Alison L. Booth

Australian National University (ANU) - Research School of Social Sciences (RSSS); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Patrick J. Nolen

University of Essex; IZA Institute of Labor Economics

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Abstract

Risk theories typically assume individuals make risky choices using probability weights that differ from objective probabilities. Recent theories suggest that probability weights vary depending on which portion of a risky environment is made salient. Using experimental data we show that salience affects young men and women differently, even after controlling for cognitive and non-cognitive skills. Men are significantly more likely than women to switch from a certain to a risky choice once the upside of winning is made salient, even though the expected value of the choice remains the same.

Keywords: gender, salience, risk-aversion, probability weights, cognitive ability

JEL Classification: D8, D81, J16

Suggested Citation

Booth, Alison L. and Nolen, Patrick J., Salience, Risky Choices and Gender. IZA Discussion Paper No. 6400, Available at SSRN: https://ssrn.com/abstract=2019452

Alison L. Booth (Contact Author)

Australian National University (ANU) - Research School of Social Sciences (RSSS) ( email )

Canberra, Australian Capital Territory 0200
Australia
+61 2 6125 3285 (Phone)
+61 2 6125 0182 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

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

Patrick J. Nolen

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

IZA Institute of Labor Economics ( email )

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

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