Even female investors juiced by testosterone

It seems academia is on a run involving gender issues in the business world. Following a recent study on whether women construct their own glass ceilings, results published in the Proceedings of the National Academy of Sciences of the United States of America suggests that women with higher levels of testosterone take more risks with their money – both in earning it (career choices) and making more of it (investing).

Testosterone, which is widely viewed as the male sex hormone, is found in the bodies of both men and women, though in varying amounts. Men tend to have more of the juice associated with risky behaviors, assertiveness and fearlessness, among the many other brutish manifestations associated with caricatures of the male of the species.

Luigi Zigales of the University of Chicago and other co-authors link the presence of testosterone to a willingness to assume risks. In the research team's sample set, 36 percent of female MBA students opted for high-risk careers in finance, such as trading and investment banking. Meanwhile, 57 percent of male MBA students chose to pursue careers in these fields.

"We wanted to explore whether these gender differences are related to testosterone, which men have, on average, in higher concentrations than women, says Paola Sapienza of Northwestern University, one of the co-authors.

The research team tested more than 500 MBA male and female students' testosterone levels. Then, the participants were asked to choose between a guaranteed monetary award or a lottery involving risk and the potential of a higher payout. In later iterations, the guaranteed award increased, forcing participants to choose between risk and a higher certain result.

Men, with higher levels of testosterone, were more likely to choose the lottery alternative than women. Zigales and his team, however, also found that women with more testosterone were almost seven times more likely to assume risks than women with less. Men and women with low levels of testosterone had almost no difference in risk-taking. Married participants tended to have lower levels of testosterone, according to the study, which resulted in less risk-taking.

Earlier research in England demonstrated a link between testosterone levels and short-term financial success, with male traders tested in the morning and evening. Those with more testosterone early in the day were more likely to nab the best returns.

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