Do Women Prefer Pink?

The Effect of a Gender Stereotypical Stock Portfolio on Investing Decisions

H.M. Prast, M. Rossi, C. Torricelli, C. Druta

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Abstract

We investigate whether lack of familiarity may contribute to an explanation of the gender gap in stock market participation and risk taking. We use ads in widely read women magazines to select companies that we assume to be more familiar to women than to men, and construct a “pink” portfolio. We construct a “blue” portfolio by selecting stocks from the AEX index. We ask members of the CentERpanel how they would allocate 100.000 euro of pension wealth. Half of respondents are given the choice between government bonds and a portfolio consisting of companies most traded at Amsterdam Exchanges, while the other half can choose between government bonds and our “pink” portfolio. We find that significantly more women than men choose not to respond after having seen the question and that respondents tend to allocate their hypothetical savings fifty-fifty over stocks and bonds. This could be interpreted either as going for the default choice or the 1/n heuristic. We find a pink portfolio effect among older women, and a significant of framing which is larger for women than for men. We also find that women who already own stocks allocate significantly more to the stock basket than women who do not, which may be interpreted as an effect of familiarity. We find no such effect among men. Our evidence does not show that lack of familiarity with the large companies most traded at the Amsterdam stock exchange explains the gender gap in participation and portfolio choice. What we do find, however, is that a pink portfolio reduces decision time for women, and results in women deciding quicker than men.
Original languageEnglish
Place of PublicationTilburg
PublisherNETSPAR
Number of pages45
Volume01/2014-009
Publication statusPublished - Jan 2014

Publication series

NameNETSPAR Discussion Paper
Volume01/2014-009

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Investing
Familiarity
Gender gap
Government bonds
Stock market participation
Participation
Wealth
Market risk
Stock exchange
Older women
Heuristics
Risk taking
Portfolio choice
Pensions
Large companies
Savings

Cite this

Prast, H. M., Rossi, M., Torricelli, C., & Druta, C. (2014). Do Women Prefer Pink? The Effect of a Gender Stereotypical Stock Portfolio on Investing Decisions. (NETSPAR Discussion Paper; Vol. 01/2014-009). Tilburg: NETSPAR.
Prast, H.M. ; Rossi, M. ; Torricelli, C. ; Druta, C. / Do Women Prefer Pink? The Effect of a Gender Stereotypical Stock Portfolio on Investing Decisions. Tilburg : NETSPAR, 2014. (NETSPAR Discussion Paper).
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Prast, HM, Rossi, M, Torricelli, C & Druta, C 2014 'Do Women Prefer Pink? The Effect of a Gender Stereotypical Stock Portfolio on Investing Decisions' NETSPAR Discussion Paper, vol. 01/2014-009, NETSPAR, Tilburg.

Do Women Prefer Pink? The Effect of a Gender Stereotypical Stock Portfolio on Investing Decisions. / Prast, H.M.; Rossi, M.; Torricelli, C.; Druta, C.

Tilburg : NETSPAR, 2014. (NETSPAR Discussion Paper; Vol. 01/2014-009).

Research output: Working paperDiscussion paperOther research output

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Prast HM, Rossi M, Torricelli C, Druta C. Do Women Prefer Pink? The Effect of a Gender Stereotypical Stock Portfolio on Investing Decisions. Tilburg: NETSPAR. 2014 Jan. (NETSPAR Discussion Paper).