Are there any differences in the risk taking abilities of males and females? Does culture have an impact on these stereotypes?
Gender & Finance Literature Review Series #5: Pondorfer, Barsbai and Schmidt (2016)
In this G&F LRS #5, we analyze the following research paper:
Pondorfer A, Barsbai T, Schmidt U. 2017 “Gender Differences in Stereotypes of Risk Preferences: Experimental Evidence from a Matrilineal and a Patrilineal Society” Management Science, 63(10) 3147-3529.
This paper allows us to understand the impact of cultural differences on the stereotypes of risk taking abilities between the two genders. Pondorfer, Barsbai and Schmidt (2017) examine stereotypes based on gender risk taking ability while taking samples from two non-traditional societies, the patrilineal Palawan in the Philippines and the matrilineal Teop in Papua New Guinea. They are also interested in finding culture specific reasons for stereotypes based on gender.
Why compare these two societies?
Both the societies had similar occupational patterns with farming being the primary industry and fishing or animal husbandry being the secondary one. The major difference was that the Teop society is matrilineal in nature, which means that the line of descent goes through the daughter and not the son. This means that women have rights over resources unlike the Palawan society where men had these rights.
How was the experiment conducted?
The sample population is asked to choose from a series of 50/50 gambles. Each of the 5 gambles have a certain payoff and another payoff based on a particular probability. The other payoff keeps increasing in expected payoff and risk as is evident from an increasing standard deviation. Each person is asked to pick a gamble for himself/herself on which they would pay real money. Secondly, each person is asked to guess that which gamble would be chosen by a male and a female member from their particular society. This would help to know the stereotype that is prevalent about the genders’ risk preferences in the particular society. In totality 103 people from the Palawan society and 96 people from the Teop society were asked to do this experiment.
What did the authors infer?
It was found that, irrespective of the gender criterion, Palawan members were less risk averse than Teop members. While 55% of the Palawan sample chose risky games, only 33% of the Teop sample did so. There were no observable differences in gender risk preferences across both societies. The entire Palawan sample makes higher predictions about the other peoples’ gamble choices than the Teop samples. This result is seen to be true disregarding the gender criterion. Men from Palawan (patrilineal society) underestimate womens’ risk taking ability. On the contrary, men from matrilineal Teop overestimate womens’ risk taking ability. Women from both societies have almost accurate estimations of risk for the men in the society. Both men and women in both societies predict their own gender’s risk taking ability very accurately. Pondorfer, Barsbai and Schmidt conclude that gender is not a major determinant of risk preferences. On the contrary, ‘nurture’ or the cultural environment in which the people live plays a very important role in the perception of risk taking ability.
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