The Role of Gender, Cognitive Attributes and Personality on Willingness to Take Risks

Abstract

The aim of this research is to provide a further examination of the role gender plays as an influence on risk preferences. A combination of ordinary least squares (OLS) and logit regressions were carried out on data collected from 425 university students, including demographic and personality variables, along with GPA"s and CRT scores. This study found females reported lower levels of willingness to take risks than males. In an addition to the current literature, it was found that females also achieved lower scores on a cognitive reflection test (CRT). When separated by major, the gender gap was found to be the lowest for engineering and science students. None of CRT score, Maths GPA, or overall GPA were found to be correlated with risk willingness, suggesting societal conditioning as a possible cause of females being more risk averse than males. Personality variables along with gender were found to be correlated with willingness to take risk. These findings have implications for creating greater awareness of how females" different risk preferences are generated and managed.

Cultural, cognitive and personality traits in risk-taking behaviour: evidence from Poland and the United States of America

“…Mayfield, Perdue and Wooten (2008) indicate that more extraverted individuals tend to engage in short-term investing, while those with higher neuroticism and risk-aversion levels avoid it. Agnew and Harrison (2017) argue that males who report higher levels of impulsiveness and extraversion and lower levels of neuroticism record higher levels of general risk willingness. Prompted by the absorbing evidence in this field, we wanted to explore the relationship between personality and risk propensity.…”

Retail Investors’ Financial Risk Tolerance and Risk-taking Behaviour: The Role of Psychological Factors

“…If an investor is not impulsive, it can likewise prove to be dangerous for him, in the light of the fact that wavering or not making any move can turn into an obligation over quite a while. Agnew and Harrison (2017) propose that men having higher levels of impulsiveness and extraversion and lower levels of neuroticism exhibit a greater readiness to take risks in general. Hence, it is expected that:…”

“…If an investor is not impulsive, it can likewise prove to be dangerous for him, in the light of the fact that wavering or not making any move can turn into an obligation over quite a while. Agnew and Harrison (2017) propose that men having higher levels of impulsiveness and extraversion and lower levels of neuroticism exhibit a greater readiness to take risks in general. Hence, it is expected that: H 3 : Impulsiveness and financial risk tolerance of an individual investor are significantly related. H 4 : Impulsiveness and financial risk-taking behaviour of an individual investor are significantly related. …”

Financial Literacy, Behavioral Biases and Investor's Portfolio Diversification: Empirical Study of an Emerging Stock Market

“…Men are more overconfident i.e. men trade is 45% more than women as well as female are more risk averse than men (Barber & Odean, 2001;Agnew & Harrison, 2017). Young individuals with low income and low education have more overconfidence in portfolio stock investment.…”