The Impact of Testosterone on Financial Risk Tolerance

Abstract

This study aims to examine the relationship between gender and financial risk tolerance. A mixed (qualitative and quantitative) approach was adopted with 100 respondents consisting of 63 Moroccan men and 37 Moroccan women, aged between 18 and 47 years. The analysis of the responses to the questionnaire based on the risk tolerance question of The Survey Of Consumer Finances, demonstrated that men have a higher risk tolerance than women and that there is a relationship between gender and individuals' attitude toward risk. The results of the questionnaire show that 78.37% of the women surveyed have no tolerance for risk and only 21.62% of women are more tolerant of financial risk. While 35 men in our sample are willing to take significant financial risks and only 11 men prefer not to take any. Otherwise, 23.81% of the men surveyed are intolerant of financial risk and 76.19% are more tolerant of financial risk. The regression analysis examined the relationship between testosterone levels in the sample and financial risk tolerance. It was found that there was a positive relationship between the two variables. However, the study reveals that testosterone is not the only factor that could explain excessive risk-taking and thatother variables can also explain financial risk tolerance.