1. Gender and economic preferences
Anna Dreber Almenberg
Stockholm School of Economics
Konjunkturinstitutet

2. Background Many important outcomes differ for men and women Why?
Labor market, financial markets
Why?
Discrimination?
Differences in performance?
Differences in preferences?

3. Background Recent attention: preference explanation
Are there gender differences in economic preferences?
If yes: why?
Cultural or biological variables? Interactions?
We explore both questions
Joint work with Anne Boschini, Juan-Camilo Cárdenas, Emma von Essen, Astri Muren and Eva Ranehill (among others)

4. Focus on 3 types of preferences
Risk preferences
Competitiveness
Social preferences
Outline:
Earlier research
Some new studies
Labor market relevance (risk and competitiveness)

5. The use of experimental economics
Inspired by psychology, mainly in the lab
Strenghts:
Good for randomization
Revealed preferences
Isolation of specific factors
Replications
Weaknesses:
Artificial?
External validity?
Field experiments solution

6. Risk preferences
Gambles with given probabilities with monetary outcomes
Do you prefer X kr with certainty or a coin toss where you can get 200 or 0 kr?
We vary the certain amount (e.g. X from 20 to 160): when does the individual prefer the certain amount to the gamble?
Different versions
E.g. pairs of lotteries

7. Risk preferences Risk averse in the domain of gains
Risk loving in the domain of losses
Do you prefer to gain 90 kr with certainty or a coin toss where you can gain 200 or 0 kr?
Do you prefer to lose 90 kr with certainty or a coin toss where you can lose 200 or 0 kr?
Large variation between (and within) individuals
Gender differences?

8. Results risk Men are more risk taking than women
Finucane
Croson and Gneezy 2009

9. Exceptions and causes A few interesting exceptions (M=F)
Professional investors
Mixed vs. same sex schools and groups
Colombia vs Sweden
Hormones?
Cárdenas, Dreber, von Essen and Ranehill in press

10. Competitiveness
How do individuals react to different types of incentives?
Self-selection and performance
Do men and women self-select into different payment schemes because of different preferences or beliefs?
Do men and women perform differently depending on the payment scheme?

11. 2 different measures of competitiveness
Self-selection/choice of competition or piece-rate payment
Ex: You are to solve mazes during 5 min. You can choose 1 out of 2 payment schemes:
1. $1 for each maze solved
2. $3 for each maze solved if you solve at least as many mazes as another random person, otherwise $0
What payment scheme do you prefer: 1 or 2?
Performance under competition vs piece-rate
First payment scheme 1, then 2. Competitiveness is the performance change
Gender differences?

12. Results competitiveness
Men are if anything more competitive: choice
But culture/environment important
Massai vs Khasi
Not always in obvious way…
Gneezy and Rustichini 2004, Gneezy et al. 2009, Zhang 2010, Dreber, von Essen and Ranehill 2011, Booth and Nolen 2012

13. Results competitiveness
Cárdenas et al. in press
1200 children aged 9-12 in Colombia and Sweden
Global gender gap index 2009: Sweden 4, Colombia 56
Competitiveness in class room

14. Experimental setup class room
Math or word search, 2 min each stage
Stage 1: Individual performance, 3p
Stage 2: Forced competition, 6 or 0p
Stage 3: Choice to compete –then performance
No performance feedback
Competition against 1 random child
Points=pens and erasers
Performance change

15. Choice to compete or not
Not uniform results comparing Colombia and Sweden

16. Choice to compete or not
~200 children in Stockholm aged 16-18
Task matters
Confidence/beliefs in performance key
p=0.001

17. Social preferences Payoff of other person enters my utility function
Weight can be positive or negative
Dictator game
One person gets an endowment of money and can choose how to split it between self and other person
Second person does nothing
Trust game
First person can send money to second person, money sent is multiplied, second person can send some money back
Second person’s money is not multiplied

18. Results altruism Women if anything more altruistic
Charity: Gender difference early
Social expectations can be important
Boschini et al. 2011
”Inequality aversion” vs ”efficiency”
Dreber, von Essen and Ranehill 2011b

19. Results trust Trust: M=F or M>F (some exceptions)
Trustworthiness/reciprocity: M=F or M<F (some exceptions)
Croson and Gneezy 2009

20. Study on representative sample in Sweden
Earlier studies mainly on students/specific groups
Sample can be important
Board members
Students and non-students
1350 individuals in Sweden, sampled fall 2011
50% response frequency
1000 phone survey, 350 postal survey
Measures of risk preferences, competitiveness in two different domains, altruism/generosity, trust

21. Results No gender differences: Gender differences Risk puzzle
Altruism/generosity, risk preferences, competitiveness in word search
Gender differences
Men are more trusting
Men more competitive in math
Especially against women
Disappears with income control
Risk puzzle
Almenberg and Dreber 2011 other representative study: men more risk taking

22. Labor market relevance
Risk preferences:
Fewer women in sectors with variable pay instead of fixed wage
Risk measures correlate with employment choice in large German representative study
Less risk taking: more likely to self-select into jobs with more stable wage with lower wage on average
Causality not obvious…
Bonin et al. 2007, Dohmen et al. 2011

23. Labor market relevance
Competitiveness:
Attitudes to how important money/work is explains part of gender wage gap
Women sometimes less likely to apply for jobs with competitive payment scheme
Choice of competition explains 25% of variation in the choice to take a competitive high school entrance test
Controlling for grades etc, 7 percentage points
Women perform worse than men on important competitive entrance exams, opposite otherwise
Fortin 2008, Manning and Swaffield 2008, Flory et al. 2010, Manning and Saidi 2010, Zhang 2010, Ors et al. 2011

24. Discussion Some evidence of gender differences in preferences
More work needed on labor market relevance
Competitiveness particularly important?
Math
More work needed on understanding when there is a gap in preferences
For policy etc
ag vet inte exakt hur det ser ut, men den där studien från svenskt näringsliv som finner att kvinnor byter jobb mer sällan men får högre kompensation när de väl gör det säger att mäns och kvinnors beteende på arbetsmarknaden skiljer sig ååt på sätt som lätt kan tros vara korrelerade med underliggande preferenser och som har ekonomisk relevans. tänkte bara att det är en bra grej att säga:-)