Risk Attitude and Capital Market Participation: Is There a Gender Investment Gap in Germany?

55 Pages Posted: 19 Jan 2021

See all articles by Carolin Schmidt

Carolin Schmidt

University of Cambridge - Department of Land Economy; ZEW – Leibniz Centre for European Economic Research

Jan-Christian Fey

University of St. Gallen

Martin Weber

University of Mannheim - Department of Banking and Finance

Oliver Lerbs

University of Muenster

Date Written: 2020

Abstract

Do women invest differently than men? We contribute to the answer of this question by analysing the Panel on Household Finances (PHF) of the German Bundesbank. This representative panel collects a wide variety of behavioural and financial variables in the area of household finance. We find that participation in risky assets is generally lower among women than among men. Once risk attitude is controlled for, this effect shrinks to only2.6 percent. We find no difference when single women are compared to single men – even irrespective of other demographic variables. The raw gap in capital market participation is mainly explained by different risk attitudes and monetary endowments, but women would participate even less in the capital market if they reacted as sensitively to risk aversion as their male counterparts. Lastly, given participation in the market, we find that both genders hold comparable portions of risky assets in their portfolios. Within their risky assets, men invest more in certificates and listed shares whereas women invest more in funds.

Keywords: Capital market participation, gender, risk attitude, risky assets

JEL Classification: G11

Suggested Citation

Schmidt, Carolin and Fey, Jan-Christian and Weber, Martin and Lerbs, Oliver, Risk Attitude and Capital Market Participation: Is There a Gender Investment Gap in Germany? (2020). ZEW - Centre for European Economic Research Discussion Paper No. 20-080, Available at SSRN: https://ssrn.com/abstract=3766073 or http://dx.doi.org/10.2139/ssrn.3766073

Carolin Schmidt (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

HOME PAGE: http://www.carolinschmidt.de

Jan-Christian Fey

University of St. Gallen ( email )

Bodanstrasse 8
SIAW-HSG
St.Gallen, 9000
Switzerland

Martin Weber

University of Mannheim - Department of Banking and Finance ( email )

D-68131 Mannheim
Germany
+49 621 181 1532 (Phone)
+49 621 181 1534 (Fax)

Oliver Lerbs

University of Muenster ( email )

Schlossplatz 2
Muenster, D-48149
Germany

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