Markku Kaustia's paper accepted for publication in the Journal of Economic Behavior and Organization
30.06.2011
An article "The gender effect in risky asset holdings" by Marja-Liisa Halko (Aalto, Economics), Markku Kaustia, and Elias Alanko (OP-Pohjola Group) was accepted for publication in the Journal of Economic Behavior and Organization.
Abstract
We study the relation between gender and stock holdings in Finland, a particularly gender equal country. We show that it is crucial to control for risk aversion using a measure of subjective risktaking, rather than measures derived from abstract gambles. Controls related to financial knowledge and resources also explain the gender difference. The residual effect of the male gender on the conditional equity share, after all appropriate controls, is 3 percentage points and statistically significant. The effect on stock market participation on the other hand is close to zero or negative, so men contribute more to the nonparticipation puzzle conditional on covariates. The gender difference mainly works through women’s higher risk aversion, which we find extends to finance professionals and wealthy private banking customers.
Download the paper here.