«--Previous Post | Blog Index | Next Post--»
Financial Risk-Taking Tied to Testosterone
No kidding. A new study finds that higher levels of testosterone correlate with financial risk-taking behavior. A Harvard study assessed men's testosterone levels before participation in an investment game, and found those whose testosterone levels were more than one standard deviation above the mean invested 12 percent more than the average man in a risky investment.
A previous study had already proved that men are generally more likely than women to take investment risks. Another demonstrated that male stock market traders experienced greater profits on days their testosterone was above its median level. The Harvard study, forthcoming in Evolution and Human Behavior, was the first study to directly examine, and find a relationship between, testosterone and financial risk-taking.
So, should the Congressional bail-out include estrogen replacement therapy for financially foolish CEOs?
For those interested in the details of the study…
Saliva samples were taken from 98 males aged 18 to 23, before participation in the investment game. The researchers also assessed facial masculinity, associated with testosterone levels at puberty. All players were given $250, and asked to choose an amount between $0 and $250 to invest. The participants kept the money that was not invested. A coin toss determined the investment's outcome, and if the participant lost the coin toss, the money allocated to the investment was lost. However, if the coin toss was won, the participant would receive two and a half times the amount of their investment. At the end of the study, one person was selected by lottery to receive the cash amount of their investment, which created a monetary incentive for the participants. Men whose testosterone levels were more than one standard deviation above the mean invested 12 percent more than the average man into the risky investment. Men with a facial masculinity score of one standard deviation higher than the mean invested 6 percent more than the average man.
Julia Whitty is Mother Jones' environmental correspondent, lecturer, and 2008 winner of the Kiriyama Prize and the John Burroughs Medal Award.
Comments
So when Wall Street is rebuilt we need to have women running it... the glass ceiling might just be shattered by the markets tanking!
Fair Trade's prescription might not be such a terrible outcome to the financial crisis, but neither her interpretation nor Julia Whitty's is particularly on-the-mark, scientifically.
Testosterone is always a "usual suspect" when trying to explicate stereotypically masculine problem behaviors (usually aggression, but in this case financial risk-taking). The implied (or openly stated) argument, is invariably that men do bad things because of testosterone.
However, in research, the opposite causal path has tended to emerge, the idea that when men are placed in competitive, socially-dominant situations, testosterone increases. For example, one study merely told a group of men that the group to which they had been assigned was predicted to win a notional competition, while another was told that their group was predicted to lose. Strikingly, the men in the "winners" group showed significantly higher testosterone levels than the men in the "losers" group.
Also strikingly, studies have attempted to show a relationship between artificially injected mice (I don't know if this has been done in humans, since testosterone is really not my area of expertise). No one, as far as I know, has ever shown a relationship between artificially increase testosterone and aggression.
Moreover, I find the idea that men's supposedly higher risk-taking propensity alone makes for bad investments to be simplistic, at best. Obviously, managing risks effectively is a component of successful financial planning, regardless of our current crisis. The study in question also does not speak to expected returns or any other means to evaluate risk-taking in the context of the current crisis, which is, as we know, less a function of bad-risk management and more a function of ignoring relevant market indicators.
Posted by: Mjameson on 09/30/08 at 8:50 AM Respond
There was an article stating that conservatives were afraid. Now this article says testosterone results in risk taking(to be distinguished from being "reckless".) So Conservatives being fearful will not take a risk on Obama. They are afraid of change. They lack testosterone(aka balls).
Posted by: Betty on 09/30/08 at 9:42 AM Respond
OK, so they bet more; so how did they do?
Posted by: robster on 10/01/08 at 6:37 AM Respond
Black men have more testosterone than White men based upon prostate cancer research. This means that Obama will be more of a risk taker(changer) then the White woman Palin, who will be President if McCain can't do the job.
Posted by: Channon Christian on 10/01/08 at 7:37 AM Respond
Men are, in general, less risk-averse than women, specifically because of testosterone. Just look at sex-ratio statistics. More boys are born than girls, but, by adulthood/late adulthood, it evens out. This is because boys do stupid things all the time. The reason the show "Jackass" made me laugh at times is because it demonstrated my point. Boys are more willing to take risks. However, I'd like to see a study determine if it is actually the testosterone level or the male brain, which cannot consider more than one thing at once and, thus, rarely considers consequences...this phenomenon is blatantly more obvious when you look at Republican males vs. Democratic males. There's a reason the default brain and body in humans is female...
Posted by: hahaha on 10/04/08 at 8:42 AM Respond
hahaha, you racist to blame testosterum, because as Shannon stated, Black folk have more than White males. Testosterum is good, not bad.
Posted by: Willy on 10/05/08 at 7:39 AM Respond
ARCHIVE
RECENT COMMENTS
Making Iraq Fertile (2)
researcher wrote:
let americans pay for it.
wanna bet how much they hate us...
[more]
Brazil Changes on Climate Change (4)
Jimmy wrote:
I took care of my own guilt by getting a bunch of free car...
[more]
Steve Irwin, Illegal Whaling Ship Hunter? (11)
Thundersalmon wrote:
Steve Irwin never went about using acts of terrorism to sp...
[more]
More Genetic Tests: Still Creepy (2)
dan wrote:
Well said Michael. I'd also note for every LaBron James (...
[more]
Charge Your Cellphone By Talking (3)
Bill Moore wrote:
I think we should harness all of the hot air coming out of...
[more]
Obama's (And Our) Clean-Coal Blues (5)
Scott wrote:
The media is not the last word on all things green. Two e...
[more]
WTF? ExxonMobil Funds Research—By An Astrophysicist—On Polar Bears And Climate Change (4)
Tina wrote:
As of now, the Minister of the Environment has asked Envir...
[more]
Listen Up, Pandas, You Need to Fight (17)
ziggxzagg wrote:
i totally agree,
ive been asking for a panda for the last ...
[more]
Huntington vs. Burlington: How to Grow a Healthy City (20)
yerbatera wrote:
Great story! Have lived in both urban liberal enclaves & ...
[more]
All-Expenses-Paid India Vacation, Courtesy of Your Health Insurer (7)
fixedknee wrote:
I agree that doctors' bills are high. Part of the problem ...
[more]
Movable Type 3.33


Posted by: Fair Trade on 09/30/08 at 3:09 AM Respond