The Influence of Gender on Individuals' Ability to Predict Their Own Risk Tolerance: Evidence from a European Country

• Tipo: Artigo em Revista Científica Internacional
• Data: 2024

Autores

Lobao, J (Autor) FEP

Revista

Título: Administrative Sciences

Vol. 14

Página Final: 56

ISSN: 2076-3387

Indexação

ISI Web of Knowledge - 3 Citações

ISI Web of Science

Scopus - 3 Citações

Outras Informações

ID Authenticus: P-010-40R

DOI: 10.3390/admsci14030056

Abstract (EN): The literature on individuals' ability to predict their own level of risk tolerance is scarce and presents divergent results. Utilizing both differential prediction models and logit models on a sample of 391 individuals in Portugal, this study demonstrates that respondents' gender play a crucial role in this predictive ability. Men tend to overestimate their level of risk tolerance, while women tend to believe they are less risk-tolerant than they actually are. Furthermore, the results reveal that men's ability to correctly predict their level of risk tolerance is significantly higher. Being a man implies a 20% higher probability of being consistent in this prediction compared to being a woman, even after controlling for a set of sociodemographic factors. The finding of a systematic inconsistency between measures of subjective and objective risk tolerance suggests that the choice between the two measures of risk propensity is not indifferent. Our findings have relevant implications in the fields of corporate finance, financial investment, and various other spheres of economic life.

Idioma: Inglês

Tipo (Avaliação Docente): Científica

Nº de páginas: 16