Gender/Sex Differences in the Impact of Salient Financial Cues on Investment Decisions

Gürel, B. | Palan, S.

Status: Writing

We examine whether investors' gender and sexuality influence financial return expectations, subjective risk perceptions, and investment propensity when these investors are exposed to salient financial cues. Using incentivized experimental data from 1,336 participants who evaluate stock price charts under different information conditions, we jointly model expected returns, perceived risk, and investment propensities. Even though the finance literature documents robust gender differences in, e.g., financial risk taking, we find little support for material, unconditional gender/sexuality differences in expected returns, perceived risk, or investment propensity. In our data, gender/sexuality primarily operate through interaction effects with contextual financial cues such as reinforcement signals and analyst recommendations. These moderation effects are weakest for expected return beliefs, stronger for subjective risk perceptions, and strongest for investment propensity decisions.