Gender differences in risky asset behavior: the importance of self-confidence and financial literacy

Andrej Cupak, Pirmin Fessler and Alyssa Schneebaum

Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics

Abstract: Women are less likely than men to hold risky financial assets, a fact that has often been attributed to differences in risk aversion and, more recently, to differences in financial literacy and investor confidence. This paper studies the role of individuals’ confidence in their own financial literacy in explaining the gender gap in investment in risky assets, while controlling for actual financial literacy and a measure of risk aversion. It is the first paper to assess the role of confidence independent of actual financial knowledge for a large set of countries and it is the first to explore the role of confidence by using counterfactual decomposition techniques. Results from our analysis confirm recent findings of modern behavioral finance: confidence is a strong determinant of risky financial behavior and accounts for a large part of the gender gap.

Keywords: self-confidence; financial literacy; financial behavior; gender; decomposition (search for similar items in EconPapers)
JEL-codes: D14 D91 G11 G53 I20 (search for similar items in EconPapers)
Date: 2020-09
New Economics Papers: this item is included in nep-fle, nep-gen and nep-upt
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Gender differences in risky asset behavior: The importance of self-confidence and financial literacy (2021)
Working Paper: Gender differences in risky asset behavior: the importance of self-confidence and financial literacy (2020)
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