Do Women Prefer Pink? The Effect of a Gender Stereotypical Stock Portfolio on Investing Decisions

45 Pages Posted: 27 Mar 2014

See all articles by Henriette Prast

Henriette Prast

Tilburg University

Mariacristina Rossi

University of Turin - Department of Economics

Costanza Torricelli

University of Modena and Reggio Emilia - Department of Economics; Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN); Center for Research on Pensions and Welfare Policies (CeRP)

Cristina Druta

Maastricht University

Date Written: January 31, 2014

Abstract

We investigate whether lack of familiarity may contribute to an explanation of the gender gap in stock market participation and risk taking. We use ads in widely read women magazines to select companies that we assume to be more familiar to women than to men, and construct a “pink” portfolio. We construct a “blue” portfolio by selecting stocks from the AEX index. We ask members of the CentERpanel how they would allocate 100.000 euro of pension wealth. Half of respondents are given the choice between government bonds and a portfolio consisting of companies most traded at Amsterdam Exchanges, while the other half can choose between government bonds and our “pink” portfolio. We find that significantly more women than men choose not to respond after having seen the question and that respondents tend to allocate their hypothetical savings fifty-fifty over stocks and bonds. This could be interpreted either as going for the default choice or the 1/n heuristic. We find a pink portfolio effect among older women, and a significant of framing which is larger for women than for men. We also find that women who already own stocks allocate significantly more to the stock basket than women who do not, which may be interpreted as an effect of familiarity. We find no such effect among men. Our evidence does not show that lack of familiarity with the large companies most traded at the Amsterdam stock exchange explains the gender gap in participation and portfolio choice. What we do find, however, is that a pink portfolio reduces decision time for women, and results in women deciding quicker than men.

JEL Classification: G02, G10, G11, J16, M30

Suggested Citation

Prast, Henriette and Rossi, Mariacristina and Torricelli, Costanza and Druta, Cristina, Do Women Prefer Pink? The Effect of a Gender Stereotypical Stock Portfolio on Investing Decisions (January 31, 2014). Netspar Discussion Paper No. 01/2014-009, Available at SSRN: https://ssrn.com/abstract=2416122 or http://dx.doi.org/10.2139/ssrn.2416122

Henriette Prast (Contact Author)

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

Mariacristina Rossi

University of Turin - Department of Economics ( email )

Via Po, 53
Torino, 10124
Italy

Costanza Torricelli

University of Modena and Reggio Emilia - Department of Economics ( email )

Viale Berengario 51
41100 Modena, Modena 41100
Italy
+390592056733 (Phone)
+390592056937 (Fax)

HOME PAGE: http://www.economia.unimore.it/torricelli_costanza/index.htm

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN) ( email )

via Berengario 51
Modena, modena I-41100
Italy

Center for Research on Pensions and Welfare Policies (CeRP) ( email )

Via Real Collegio, 30
Moncalieri, Turin 10024
Italy

Cristina Druta

Maastricht University

P.O. Box 616
Maastricht, Limburg 6200MD
Netherlands

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