Estimation and Impact of Gender Differences in Risk Tolerance

TitleEstimation and Impact of Gender Differences in Risk Tolerance
Publication TypeJournal Article
Year of Publication2010
AuthorsNeelakantan, U
JournalEconomic Inquiry
Volume48
Issue1
Pagination228-233
Call Numbernewpubs20100407_Neelakantan.pdf
KeywordsNet Worth and Assets, Pensions, Risk Taking
Abstract

This paper provides numerical estimates of the distributions of risk tolerance for men and women. A simple model of individual portfolio choice is calibrated to data on Individual Retirement Accounts from the Health and Retirement Study to obtain the estimates. Results show that women tend to be less risk-tolerant than men. The estimates are then used to measure the impact of risk tolerance on wealth accumulation. Simulations show that the difference in risk tolerance can account for around 10 of the gender difference in accumulated wealth.

Endnote Keywords

risk tolerance/individual retirement accounts/wealth accumulation

Endnote ID

21820

Citation Key7438