Economics, Literature and Scepticism

Powered by Blogger.

About Me

My photo
I am a PhD student in Economics. I am originally from South Africa and plan to return there after my PhD. I completed my M. Comm in Economics and my MA In Creative Writing (Poetry) at the University of Cape Town, where I worked as a lecturer before starting my PhD.

Tuesday, December 01, 2009

Gender and Risk: Context and History

Posted by Simon Halliday | Tuesday, December 01, 2009 | Category: , , | my series on risk aversion, competition and gender (see my first post here) after a long hiatus, today's papers try to assess whether risk and competition preferences are determined by 'nature', something inherent in women, or 'nurture', the environment in which the person grew and came to be socialised, or some combination of the two, or maybe something which is residual and unexplained. Moreover, are risk-preferences 'state-based' - are they contingent on the situation or context in which a person makes their decisions. We can therefore ask the following questions. Does the composition of the school, business, or social group in which you find yourself affect your willingness to engage in risky behaviour, or your willingness to compete? Does your personal history of nurture, as a woman, affect your risk preferences?

A recent pair of papers by Alison Booth and Patrick Nolen, both of the University of Essex, grapples with these questions using experimental methods and a quirk of policy to evaluate the mechanisms and structure of risky behavior and competition - they want to understand whether nurture or nature speak out. To foreshadow, they come to conclusions similar to one of my favourite books, Nature Via Nurture by Matt Ridley. Men and women, girls and boys, seem to tend towards specific attitudes towards risk, but these attitudes are dramatically affected by the nurture that they experience and the context in which they find themselves. It seems, though, that girls, more than boys, are more affected by nurture and by context and that by manipulating these we can provide a context in which girls choose to compete about as much as boys, or choose to act as riskily (in a good way) as do boys.

In their first paper, Booth and Nolen interrogate whether a girl's history (coeducational or single sex schooling) and her context (being in a group of girls only or a group of boys and girls) affect her choice to compete (defined well in their paper, don't worry to much about it here). In the second paper, they assess whether a girl's history or context affect her risk preferences. How do they interrogate such important questions? Well, they opened the economic experimentalists' toolbox to manipulate context, while happening upon a quirk in policy in the British education system that allowed them to isolate history. In Essex and Suffolk, which border one another, we can assume that socio-economic status is distributed similarly. Consequently, that some students, by a quirk of policy can attend single-sex schools while others, just across the border, attend coeducational schools provides us with a natural environment in which to test history, or nurture, as a determinant of risk preferences. With an experiment, we can control the composition of the group in which a subject makes decisions, to see whether this composition affects their decisions.

In both areas, Booth and Nolen resoundingly answer that nurture and context strongly affect female decisions. Girls from single sex education background behave substantially less risk aversely than girls from coeducational backgrounds. Girls from single sex educational backgrounds behave similarly to boys in this respect (boys' behavior does not seem to be affect by background, which is a separate path for inquiry about gender effects) - single sex girls' behavior vacillates from being statistically not differentiable from boys' behavior, to being slightly (very slightly) more risk averse. Similarly, girls from single sex backgrounds choose to compete far more often than girls from coeducational backgrounds, and the incidence of girls' choices to compete is not statistically significantly different to the incidence of boys' choice to compete. So nurture matters.

With respect to context, for both single sex girls and coeducational girls, context matters. Girls from both groups are likely to behave more risk aversely and to choose to compete less often when boys are included in their group. Boys, on the other hand, don't change their behavior if they're from single sex or coeducational backgrounds.

Can we consider specific policy implications of their papers? First of all, one policy could be that to evaluate girls and boys, segregated schooling or, at minimum, segregated testing environments could ensure that women perform lest risk aversely and choose to compete as regularly as boys do. Also, there could be a role for all women companies or firms in which women only compete with and interact with one another and choose not to introduce any men into the women-only environment. Now, I'm not proposing that these things should be done, but rather that they are fairly logical implications of the Booth and Nolen results.

Another result could be, simply, that we'd rather have more risk and competition averse people involved in banking and finance, and that to ensure this we employ more women in these environments. However, sample selection could bias our sample. But maybe not, because it seems as though female MBAs are still more risk averse than their male counterparts, so the selection bias may not matter too much (see Levy, Elron and Cohen, 1999).

Another question goes begging. If girls' behavior is so responsive to environment and history, why can't the same be said of boys? Are boys immune to nurture? Is their behavior more innate or less? These are questions that remain to be answered, but, I hope, will continue to be questions that researchers try their best to answer with experimental techniques and an understanding of institutional peculiarities that make work like Booth and Nolen's so compelling.

Alison Booth and Patrick J. Nolen, 2009, 'Gender Differences in Risk Behaviour: Does Nurture Matter?' University of Essex, Department of Economics Discussion Paper 672
Alison Booth and Patrick J. Nolen, 2009, 'Choosing to Compete: How Different Are Girls and Boys' University of Essex, Department of Economics Discussion Paper 673,

Currently have 0 comments: