Gender effects in intra-couple investment decision-making: risk attitude and risk and return expectations

66 Pages Posted: 29 Nov 2023

See all articles by Jan-Christian Fey

Jan-Christian Fey

University of St. Gallen

Carolin Hoeltken

University of Cambridge - Department of Land Economy

Martin Weber

University of Mannheim - Department of Banking and Finance

Date Written: November 9, 2023

Abstract

We analyse how risk attitude relates to capital market outcomes (capital market participation at the extensive and intensive margin as well as risky-asset portfolio allocation) in wife- and husband-headed households. By using two measures of risk attitude combined––financial and general-––we reduce measurement error and introduce a new notion into the household finance literature, namely that financial risk aversion acts as a mediator variable for the link between general risk aversion and capital market participation. Overall, we find that the interactions between the financial head's gender, risk attitudes, and investment behaviour are more complex than previously thought, and that the average gender gap is often driven by a sizeable gender gap in risk-loving rather than risk-averse households. We also discuss how different risk and return expectations between female and male financial heads could explain our findings and report that 40 percent of the 10.57 pp gender gap could be down to gendered views on potential Sharpe ratios.

Keywords: Capital market participation, gender, risk attitude, risk and return expectations, risky assets, intra-household decision-making

JEL Classification: G51, G41, G11, J16

Suggested Citation

Fey, Jan-Christian and Hoeltken, Carolin and Weber, Martin, Gender effects in intra-couple investment decision-making: risk attitude and risk and return expectations (November 9, 2023). Available at SSRN: https://ssrn.com/abstract=4628230 or http://dx.doi.org/10.2139/ssrn.4628230

Jan-Christian Fey

University of St. Gallen ( email )

Bodanstrasse 8
SIAW-HSG
St.Gallen, 9000
Switzerland

Carolin Hoeltken (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

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)

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