Is risk taking related to gender?

When considering who and what made the biggest contributions to women's political and social circumstances in the past 100 or so years, people usually cite suffragettes such as New Zealand's Kate Sheppard and Britain's Emily Pankhurst.

Writer Simone de Beauvoir and activist Germaine Greer might get a mention and even some men make the list, usually scientists Frank Colton, who created the first oral contraceptive, and Carl Djerassi, the father of the modern birth-control pill.

Unmentioned is the role of capitalism and the private sector, which have tended to respond better to women's needs than governments.

One of the greatest contributions to 20th-century emancipation, according to British essayist Jenny Diski, was made by the companies that produced sanitary towels.

It was Kotex and Modess, not health authorities, who for the first time presented detailed information about menstruation to the public when marketing a new product, disposable sanitary pads, Diski says. A sales campaign has probably never had such a life-changing effect on so many people, and all thanks to capitalism.

Academic websites are today replete with new research showing men and women are slaves to biological destiny.

This year, we have had several impressive pieces of research showing how testosterone levels surge in men working on financial trading floors.

This explains, some women have suggested, not only why male traders took unbelievable risks in the years leading up to the global crisis, but the recession itself. Men are to blame.

This is a popular theory, as a trawl through headlines on the topic of recession shows. "Men have messed up; let women sort it out," urged columnist Gilliam Wilmot at Britain's Financial Times. "The testosterone-packed winner-takes-all approach does not sit easily with looking after the interests of all stakeholders [shareholders, employees and customers] and managing the downside risk," she argues.

Meanwhile, a report from the prestigious British Cranfield School of Management called on companies to do more to improve the gender diversity on corporate boards.

"We might not be in quite such a dire situation if there had been more females on the boards of banks," report author Ruth Sealy said. "The evidence is that women are not more risk averse, but more risk aware."

(It seems Iceland took the message, with the government turning to two women to clean up its banking mess. The appointments of the women to head the new nationalised banks were an attempt to signal a new culture within a collapsed banking system built up by young, male, business-schooled elite, one government minister said.)

But if the University of California economics department is to be believed, a woman's risk profile is also linked to her hormones. In a paper called Menstrual Cycle and Competitive Bidding, professors Matthew Pearson and Burkhard Schipper tested the hypothesis that the menstrual cycle affected how women bid at auctions.

"On average, women bid significantly higher than men during menstruation and the premenstrual phase. There were no significant differences of bidding between men and women in the other phases of the menstrual cycle," Pearson and Schipper report. "These effects translate into profits significantly lower during the premenstrual and menstrual phases.

"We suggest an evolutionary hypothesis, according to which women are genetically predisposed by hormones to generally behave more riskily during their fertile phase of their menstrual cycle to increase the probability of conception, quality of offspring and genetic variety."

Pearson and Schipper are simply trying to show a correlation between biological factors and economic behaviour. However, it is easy to see how the finding could be misused to suggest women are ill-suited to a financial sector role.

Just as women are palpably wrong to lay all the blame for the risk-taking behaviour of male traders on gender, so too are those who continue to insist women are in thrall to their biology. As most of us know, we are not prisoners of our sex.

Follow NZStuffBlogs on Twitter and get fast updates on all Stuff's blogs.

Nick Smith is a senior financial journalist.

Newest First

Oldest First

bobberesford.com   #1   09:54 am Nov 13 2009

YES

Field Marshal   #2   01:03 pm Nov 13 2009

With regards to women.It seems to be clear then. Wisdom comes with ageing.Menopause ceases the erratic behaviour that occurs monthly.----as we already knew........

Miss Daisy   #3   02:13 pm Nov 13 2009

Everyone likes to be judged on our own individual merits, rather than as stereotypes.

Clunking Fist   #4   09:47 am Nov 16 2009

How did NZ do when we had women PM, GG & Chief Justice? Did we see a great leap forward? Not to dis women, but some of the ideas from the women giving their opinion in this article strikes me as being bigoted: the sort of gender bashing, that, if reversed, would be denouced and derided. Just sayin'.

Daveo   #5   11:38 am Nov 18 2009

Of course people will do certain things - make certain choices because of the sex that they are, better? worse? just different, viva la difference.

The reason men do stupid things to get more money is so they can get the better women, ergo women ARE to blame for all the misdeeds of the world. It has been said men and women assess risk the same way however men will see the risk and do it anyway, we wouldn't be where we are today if we didn't, therefore the question is - do we want to be where we are today? Probably not if you are a women, but then again ....

SCT   #6   10:50 pm Mar 19 2010

Risk-taking is probably more correlated with working brain cells. Hence, in the coming years, risk-taking may be less correlated with gender (due to adolescent females practising heretofore male behaviours of binge-drinking and killing brain cells).

Ad Feedback