Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment

Posted: 20 Apr 2000

See all articles by Brad M. Barber

Brad M. Barber

University of California, Davis

Terrance Odean

University of California, Berkeley - Haas School of Business

Multiple version iconThere are 2 versions of this paper

Abstract

Theoretical models predict that overconfident investors trade excessively. We test this prediction by partitioning investors on gender. Psychological research demonstrates that, in areas such as finance, men are more overconfident than women. Thus, theory predicts that men will trade more excessively than women. Using account data for over 35,000 households from a large discount brokerage, we analyze the common stock investments of men and women from February 1991 through January 1997. We document that men trade 45 percent more than women. Trading reduces men's net returns by 2.65 percentage points a year as opposed to 1.72 percentage points for women.

JEL Classification: G12, G14

Suggested Citation

Barber, Brad M. and Odean, Terrance, Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment. Quarterly Journal of Economics, 2000, Available at SSRN: https://ssrn.com/abstract=219240

Brad M. Barber (Contact Author)

University of California, Davis ( email )

Graduate School of Management
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Terrance Odean

University of California, Berkeley - Haas School of Business ( email )

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HOME PAGE: http://www.haas.berkeley.edu/faculty/odean.html

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