Over the last few years, the question of whether women invest their money in ways that differ from men has attracted plenty of interest in business and research. During the financial crisis, the press declared that women are supposedly more cautious and take a defensive stance in the stock market – so their capital investments saw greater gains in that period. The chair of Financial Psychology, Sociology and Finance Ethics at the School of Management and Innovation (SMI) at Steinbeis University Berlin (SHB) recently unveiled empirical data that subjects these speculations to scientific scrutiny.
The findings are based on the evaluation of more than 500 questionnaires given to male and female investors between 2009 and 2010 during stockholders’ meetings and investor trade shows in Germany. At the time of writing, the SHB research team had surveyed more than 1,000 people. “The women in our test group tend to be more risk-averse,” affirms Professor Dr. Dr. Sabine Meck, the department chair. “This was evident not only from the answers they gave about investment products. The scores these women gave for their willingness to take risks were significantly lower than those of their male counterparts.”
In contrast to men, women prefer liquid assets to capital investments, the only exception being real estate: “Gilt-edged concrete” as it’s called in Germany is often seen by both sexes as an investment that will ride out any crisis. Women are also much more likely to want to do bank business in person as the financial advisor carries a lot more weight with them. As a result, compared to men, a significantly lower number of women do their banking online or over the phone. “This could be that women are more afraid of losing money,” muses Meck. “Until now, a significantly smaller number of women disagreed with the statement that the word ‘credit’ still links back to the Latin word it’s derived from – ‘creditum,’ or, ‘trust’.” But it’s still up in the air as to whether women don’t trust the Internet in general or their doubts are more about banking in general. “We’ve spotted another divergence in this group, and a very well-known one. Although many more women have the German secondary school qualifications to attend college, significantly fewer actually have a college or advanced degree. It’s only in the younger women that we’re starting to see their bachelor’s degrees catch up with men,” adds Meck. “As for next steps, we want to investigate what roles age, education, religion and profession play in investment. And whether these factors steer opinions on money, and if so, how.”
These precise scientific analyses and the underlying theoretical context are the subject of various dissertations in progress at the SMI Chair and Erasmus University Rotterdam in the Netherlands. Professor Frits van Engeldorp Gastelaars is at the helm of the Dutch comparative studies. “We’re interested to see if we can measure cultural differences in attitudes toward money. We believe that what people associate with money is always dictated by culture. Scientific studies pertaining to this are still thin on the ground.” Meck agrees: “Attitudes about money hinge on numerous sociological and psychological factors. We’re assuming that we’ll run into particular ‘money types’ in our samples. Up until this point, things have been pointing to a specific gender pattern. On the whole, women tend not to associate money with power and respect as much as men do.” It will be fascinating to see how money profiles emerge in the representative samples. Theoretical insights from the studies will be discussed and put into practice at the second Finethikon, a conference on financial ethics, to be held on October 5-6, 2011 in Eichstätt.
Prof. Dr. Dr. Sabine Meck
Steinbeis Transfer Institute Financial Behavior and Ethics Berlin
su1506@stw.de