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Are women more risk-averse than men? If so, why?

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Repeated studies have shown males are less risk-averse than females, and this difference seems to be part of the reason for the male-female wage gap:

We use a Colombian TV game show to test gender differences in competitive behavior where there is no opportunity for discrimination and females face no gender specific external constraints. Each game started with six contestants who had to answer general knowledge questions in private. There were five rounds of questions and, at the end of each, one participant was eliminated. Despite equality in starting numbers, women earn less than men and exit the game at a faster rate. In particular, there are more voluntary withdrawals by women than men. We draw an analogy between the game and the process by which employees rise through the levels of a corporation. As such, we note that “glass ceilings” may result, in part, from women’s own behavior and this raises the issue of how women are socialized to behave. At the same time, our results illustrate that maintaining and promoting gender diversity at the lower/middle ranks of organizations is necessary to obtain gender diversity at the top.

Source: “Under-achievement and the glass ceiling: Evidence from a TV game show” from Universitat Pompeu Fabra, Economics Working Papers, number 1165

In studies, men are more overconfident and more competitive than women:

We examine whether men and women of the same ability differ in their selection into a competitive environment. Participants in a laboratory experiment solve a real task, first under a noncompetitive piece rate and then a competitive tournament incentive scheme. Although there are no gender differences in performance, men select the tournament twice as much as women when choosing their compensation scheme for the next performance. While 73 percent of the men select the tournament, only 35 percent of the women make this choice. This gender gap in tournament entry is not explained by performance, and factors such as risk and feedback aversion only play a negligible role. Instead, the tournament-entry gap is driven by men being more overconfident and by gender differences in preferences for performing in a competition. The result is that women shy away from competition and men embrace it.

Source:”Do Women Shy Away from Competition? Do Men Compete Too Much?” from Quarterly Journal of Economics, August 2007, Vol. 122, No. 3, Pages 1067-1101 (Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology)

Some studies posit this is because, evolutionarily, risk-taking signals quality in males – so women find guys who take some types of risks attractive:

Farthing (2005) tested a prediction derived from costly-signaling theory, that women would prefer physical risk takers (brave, athletic, fit) over risk-avoiders as long-term mates. Using scenarios involving high-risk acts, the prediction was confirmed for heroic (brave, altruistic) but not for non-heroic (brave, non-altruistic) acts. Apparently, women’s concerns over risks to their mates overrode any positive signal value of men’s risk taking, when the acts were highly risky and had no redeeming practical value. The present studies revisited the costly-signaling hypothesis using both medium- and high-risk scenarios, and it was predicted that for non-heroic acts women would prefer risk takers over risk avoiders for medium-level risks but not for highly risky acts. The prediction was supported in two studies. In Study 1, risk takers were preferred for non-heroic medium-risk acts, but risk avoiders were preferred for high-risk acts. For heroic acts, risk takers were preferred for both high- and medium-risk acts. Study 2 crossed two act risk levels with two actor skill levels, with non-heroic risks. Risk takers were preferred for the least risky combination (medium-risk act, high-skill actor) and also for the two moderately risky combinations, but risk avoiders were preferred for the riskiest combination (high-risk act, medium-skill actor). In Study 1, participants compared high-level risk takers versus risk avoiders on several person adjectives. Both heroic and non-heroic risk takers were perceived as more brave, athletic, physically fit, impulsive, attention-seeking, and foolish, and less emotionally stable and self-controlled, compared to risk avoiders. But only heroic risk takers were perceived as more altruistic, agreeable, conscientious, and sexy than risk avoiders.

Source: “Neither Daredevils nor Wimps: Attitudes toward Physical Risk Takers as Mates” from Evolutionary Psychology, 2007. 5(4): 754-777

As a corollary, seeing attractive women makes males take more risks:

Evolutionary theorists suggest that men engage in risk-taking more than women do in part because, throughout human evolutionary history, men have faced greater sexual selection pressures. We build on this idea by testing the hypothesis that risk-taking reflects a male mating strategy that is sensitive to characteristics of a potential mate. Consistent with this hypothesis, the current experiment demonstrated a positive relationship between mating motivation and risk-taking, but only in men who had been exposed to images of highly attractive females. Moreover, risk-taking in men was associated with enhanced memory for attractive female faces, indicating enhanced processing of their attractive facial characteristics. No relationship between mating motivation and risk-taking was observed in men exposed to images of unattractive women, nor was any such relationship observed in women. This experiment provides evidence that psychological states associated with mating may promote risk-taking, and that these effects are sex specific and are sensitive to situational context.

Source: “Risk-taking as a situationally sensitive male mating strategy” from Evolution and Human Behavior, Volume 29, Issue 6, Pages 391-395 (November 2008)

And studies show risk taking males prefer feminine women:

Findings from previous studies suggest that only men who are in good physical condition can afford to pursue high-risk activities and that men who engage in high-risk activities are considered particularly attractive by women. Here, we show that men’s interest in high-sensation activities, a personality trait that is known to increase the likelihood of those individuals engaging in high-risk behaviors, is positively related to the strength of their preferences for femininity in women’s faces (Studies 1–3) but is not related to the strength of their preferences for femininity in men’s faces (Study 2). We discuss these findings as evidence for potentially adaptive condition-dependent mate preferences, whereby men who exhibit signals of high quality demonstrate particularly strong preferences for facial cues of reproductive and medical health in potential mates because they are more likely than lower-quality men to succeed in acquiring such partners.

Source: “Sensation seeking and men’s face preferences” from Evolution and Human Behavior, Volume 28, Issue 6, Pages 439-446 (November 2007)

So there’s a substantial body of work purporting that men embrace risk and take bigger risks because, from a evolutionary perspective, they stand to gain more from it. Women seem less inclined to risk because, from an evolutionary perspective, they simply don’t stand to gain as much.

This probably looks very controversial to some and very obvious to others. And the smartest out there realize those two descriptors are not mutually exclusive.

My guess is that people who think being risk-averse is a universally negative trait will find this theory sexist. People who are neutral to risk-aversion won’t, unless they believe that positing any difference between males and females is sexist.

I’d love to hear some reader thoughts. I’d appreciate it if comments came from the standpoint of “this is accurate/inaccurate because” not “I personally like/don’t like this, therefore it must be true/untrue.”  :)

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About Eric Barker