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Cognitive skills, gender and risk preferences

Booth, Alison L and Katic, Pamela (2013) 'Cognitive skills, gender and risk preferences.' Economic Record, 89 (284). pp. 19-30. ISSN 0013-0249

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Abstract

In this study, we utilise data from a unique new birth-cohort study to see how the risk preferences of young people are affected by cognitive skills and gender. We find that cognitive ability (measured by the percentile ranking for university entrance at age 18) has no effect on risk preferences measured at age 20. This is in contrast to experimental studies that use IQ measures to proxy cognitive skills. However, we do find that gender matters. While young women are significantly more likely than young men to assess themselves as being prepared to take risks, women choose to invest significantly less when they are confronted with a clearly specified investment decision based on hypothetical lottery winnings. This difference between the impact of gender on risk attitudes and the hypothetical lottery investment suggests that impatience and framing affect young women and men differently.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Faculty of Social Sciences > Institute for Social and Economic Research
Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 19 Sep 2013 11:06
Last Modified: 16 Dec 2014 11:14
URI: http://repository.essex.ac.uk/id/eprint/7768

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