Gender Difference in Risk Attitude: A Literature Review (Master Thesis)

Abstract

Gender differences in risk attitudes are frequently observed and the scientific community widely agrees upon their existence. However, recent literature has challenged the notion that the gender gap is ubiquitous. In this literature review, the recent literature is examined with the purpose of verifying the existence of gender differences in risk attitudes and then examining the determinants of the gender gap. From the set of literature reviewed, there appears to be a significant difference in risk attitudes between genders, with women being more risk averse, although the difference appears to be highly context-dependent. Examined determinants that significantly affect the size of the gender gap include the presence of a safe alternative, the presence of a gender-homogenous group, salivary testosterone levels, the societal structure regarding prevailing gender roles, the role of the women in the work environment, and the framing of the decision tasks used in the study. Further developing an understanding of the gender gap in risk attitudes may aid in explaining some of the differences in behavior between men and women, for example, the sorting question related to differences in career selection. In addition, it can guide policy decisions regarding compensation toward the goal of equality between the genders.