August 24, 2009

Men less risk averse, pick riskier careers

Women are more risk averse than men when it comes to making important financial decisions, which in turn can affect their career choices, U.S. researchers say.

Paola Sapienza of the Kellogg School of Management at Northwestern University, Luigi Zingales of the University of Chicago Booth School of Business and Dario Maestripieri of the University of Chicago measured testosterone levels in saliva samples and markers of prenatal testosterone such as finger length from some 500 MBA students at the University of Chicago Booth School of Business.

During a two-day period in 2006, the participants were asked to play a computer game that evaluated their risk aversion attitudes.

Students had to choose repeatedly between the lottery and a fixed payment at increasing values. Two saliva samples were collected, once before the session and once after the test was completed.

The study, published in the Proceedings of the National Academy of Sciences, finds overall, men exhibited significantly lower risk aversion than women in the study, and had significantly higher levels of salivary testosterone than women.

In our sample set, 36 percent of female MBA students chose high-risk financial careers such as investment banking or trading, compared to 57 percent of male students, Sapienza says in a statement. We wanted to explore whether these gender differences are related to testosterone, which men have, on average, in higher concentrations than women.