UH Moment

UH Moment: Can People Learn To Embrace Risk?

New research from the University of Houston suggests gender differences in risk aversion are shaped by culture and the social environment.

Studies have shown women are more risk-averse than men, more likely to opt for the smaller sure thing than gamble on an all-or-nothing proposition — a trait experts say could help explain the persistent wage gap between men and women.

New research from University of Houston associate professor of economics Elaine Liu suggests those gender differences in risk aversion are shaped by culture and the social environment and that those differences can shift, at least in children.

“Socialization is a very important aspect in shaping one’s risk aversion,” Liu said. “This attitude towards risk is malleable. Maybe we can teach our girls to be more risk-loving so when they are adults they can choose career paths that are high-risk, high-reward.”

Liu and her team looked at the behavior of children from two distinct cultures – the matrilineal Mosuo and the traditionally patriarchal Han – who attended the same school in Yunnan, China.

When the children first began elementary school, Mosuo girls took more risks than Mosuo boys, while Han girls were less likely to take risks than Han boys, in keeping with their parents’ cultural norms. But that began to change as the children were exposed to the other culture.

“When they spend more time with their friends the socialization takes over. The peer effects created at school seems more important,” Liu said.

The researchers studied children in elementary and middle school. Liu said it’s not clear whether the changes will be sustained as the children return to their home villages. She hopes to launch a long-term study to determine if the shift in attitudes toward risk-taking is permanent.

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