Featured Research

from universities, journals, and other organizations

Being faced with gender stereotypes makes women less likely to take financial risks

Date:
November 27, 2010
Source:
Association for Psychological Science
Summary:
Last year Nicholas Kristof declared in his New York Times column what banks need to fix their problems: Not just a bailout, but also "women, women, and women." Women are generally thought to be less willing to take risks than men, so he speculated that banks could balance out risky men by employing more women. Stereotypes like this about women actually influence how women make financial decisions, according to a new study.

Last year Nicholas Kristof declared in his New York Times column what banks need to fix their problems: Not just a bailout, but also "women, women, and women." Women are generally thought to be less willing to take risks than men, so he speculated that the banks could balance out risky men by employing more women. Stereotypes like this about women actually influence how women make financial decisions, making them more wary of risk, according to a new study published in Psychological Science, a journal of the Association for Psychological Science.

Anecdotally, many people believe that women are more risk averse and loss averse than men -- that women make safer and more cautious financial decisions. And some research has supported this, suggesting that the gender differences may be biologically rooted or evolutionarily programmed.

But Priyanka B. Carr of Stanford University and Claude M. Steele of Columbia University thought that these differences might be the result of negative stereotypes -- stereotypes about women being irrational and illogical. So they designed experiments to study how women make financial decisions, when faced with negative stereotypes and when not. Past research has shown that being faced with negative stereotypes about one's group can hamper intellectual performance, and Carr and Steele reasoned it could also affect financial decision making.

In the experiments, they altered whether the participants were made to think about negative stereotypes about women or not. Some volunteers were told that they would be completing tasks to measure their mathematical, logical, and rational reasoning abilities. Since the stereotype is that women aren't talented at these things, this should raise the stereotype in the volunteer's mind.

To be very sure, these people were also asked to indicate their gender before doing the tasks. Other volunteers were told that they would be working on puzzles, and were not asked their gender first. Then, each person completed the same measures assessing their financial decision-making choices. For example, in one experiment, people decided whether to choose risky but lucrative options (e.g., a 20% chance of winning four dollars) over safer but less lucrative ones (e.g., an 80% chance of winning one dollar).

When the negative stereotype about women was not hinted at, there were no gender differences in financial decision making. Both men and women were moderately risk averse and loss averse. But when the negative stereotype was brought up, gender differences emerged.

Women made more cautious financial decisions: They were more likely to forgo lucrative opportunities so they could avoid risks and losses. Interestingly, when negative stereotypes about women (and therefore positive stereotypes about men) were relevant, men became more risk seeking. The stereotypical cues encouraged behavior that stuck to the stereotype. This suggests that earlier findings and anecdotes about differences in decision making between the sexes may actually be the result of gender stereotypes (and not the basis for them).

In the world of business and finance, risk taking (which can yield big rewards) is often valued, though it can also result in bad outcomes (as implied by the current economic crisis). Carr says that to create more temperate financial decision making there may be no need in banks and on Wall Street for a "battle of riskiness between the sexes." Reducing and removing negative stereotypes about women can leave both men and women free to make decisions they think are best. She says, "Our argument is that people's decision making and financial choices should not be burdened by stereotypes being placed on them."


Story Source:

The above story is based on materials provided by Association for Psychological Science. Note: Materials may be edited for content and length.


Journal Reference:

  1. Priyanka B. Carr and Claude M. Steele. Stereotype Threat Affects Financial Decision Making. Psychological Science, 2010; 21 (10): 1411 DOI: 10.1177/0956797610384146

Cite This Page:

Association for Psychological Science. "Being faced with gender stereotypes makes women less likely to take financial risks." ScienceDaily. ScienceDaily, 27 November 2010. <www.sciencedaily.com/releases/2010/11/101117124639.htm>.
Association for Psychological Science. (2010, November 27). Being faced with gender stereotypes makes women less likely to take financial risks. ScienceDaily. Retrieved April 19, 2014 from www.sciencedaily.com/releases/2010/11/101117124639.htm
Association for Psychological Science. "Being faced with gender stereotypes makes women less likely to take financial risks." ScienceDaily. www.sciencedaily.com/releases/2010/11/101117124639.htm (accessed April 19, 2014).

Share This



More Mind & Brain News

Saturday, April 19, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Study On Artists' Brain Shows They're 'Structurally Unique'

Study On Artists' Brain Shows They're 'Structurally Unique'

Newsy (Apr. 17, 2014) The brains of artists aren't really left-brain or right-brain, but rather have extra neural matter in visual and motor control areas. Video provided by Newsy
Powered by NewsLook.com
Is Apathy A Sign Of A Shrinking Brain?

Is Apathy A Sign Of A Shrinking Brain?

Newsy (Apr. 17, 2014) A recent study links apathetic feelings to a smaller brain. Researchers say the results indicate a need for apathy screening for at-risk seniors. Video provided by Newsy
Powered by NewsLook.com
Are School Dress Codes Too Strict?

Are School Dress Codes Too Strict?

AP (Apr. 16, 2014) Pushing the limits on style and self-expression is a rite of passage for teens and even younger kids. How far should schools go with their dress codes? The courts have sided with schools in an era when school safety is paramount. (April 16) Video provided by AP
Powered by NewsLook.com
Could Even Casual Marijuana Use Alter Your Brain?

Could Even Casual Marijuana Use Alter Your Brain?

Newsy (Apr. 16, 2014) A new study conducted by researchers at Northwestern and Harvard suggests even casual marijuana use can alter your brain. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins