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How does gender affect economic decision-making?

Dr Helena Fornwagner, Lecturer in Economics, writes about how gender and biological sex affect economic decision-making – and what the implications are for organisations.

10 October 2023

Gender identity and decision-making

People make decisions involving money daily. They range from whether they should apply for a new job in a highly competitive environment, invest in a risky asset or give to charity. For years, it has been shown that gender plays a pivotal role in shaping economic decision-making.

These past studies, conducted with so-called economic experiments, have suggested that individuals’ competitiveness, risk-taking tendencies, and altruism are influenced by whether one self-identifies as a man or woman.

Behaviour measured using economic experiments (i.e., a person gets real money and has to decide how much to give to charity or keep for themselves) strongly predicts what people generally do, for example:

  • A person’s competitiveness is connected to career success, higher wages, and educational choices
  • Risk-aversion correlates with, e.g., decisions on the financial market
  • How much one donates tells how much an individual cares about somebody else

Interestingly, women have been reported to be generally less competitive, risk-seeking, and more generous. These findings have led to various stereotypes and biases in both personal and professional settings. Moreover, they have been used to explain gender inequalities, especially in the labour market.

The problem with current thinking

The problem with existing research is that it’s unclear how much economic decision-making can be really associated with gender and how much of the behavioural differences can rather be accounted to the biological sex assigned at birth or an interplay of the two.

That’s why I, along with Brit Grosskopf from the University of Exeter Business School and Alexander Lauf, Vanessa Schöller (both University of Regensburg), and Silvio Städter (Wismar University of Applied Sciences – WINGS Professional Studies), decided that existing thinking on this topic needed to be expanded.

We aimed to disentangle gender and sex effects by studying the economic behaviour of cisgender and transgender individuals. Our approach had the added value that we finally started conducting research with non-binary participants. This leads to a much better representation in economic research of our society, which becomes more colourful every day.

The research

Our findings published in Nature: Scientific Reports are the first analysis of transgender and cisgender economic behaviour. By having these two subject groups, we can consider, for the first time, whether sex assigned at birth plays a significant part in economic decisions.

In a study featuring 780 participants (around half identifying as transgender), we hypothesised that if gender identity does determine levels of competitiveness, risk-taking or altruism, then those with the same gender identity (cis men and trans men, and cis women and trans women) would make similar monetary decisions. Meanwhile, those with a different gender identity would make significantly different economic decisions. Moreover, we suggested that participants having the same biological sex (cismen and transwomen, and ciswomen and transmen) would behave comparably.

We used a series of well-known economic experiments to determine how willing they were to engage in competitions, their willingness to take risks and how willing they were to give to charity.

Remarkably, our data does not show evidence that cis- and transgender individuals behave differently in the investigated domains. In other words, neither the gender one identifies with nor the biological sex assigned at birth drives decisions.

Part of our rationale for these new findings was that educational initiatives and a greater awareness of gender equality in private and professional settings may have narrowed any economic behavioural differences, which were first established in past (also my own) studies.

How the research could help organisations

Our research findings have numerous practical applications for organisations. Here are a few:

Gender stereotypes and biases impact decision-making: The text highlights that gender stereotypes and biases, such as the perception that women are generally less competitive, more risk-averse, and more generous, are outdated. Companies need to be aware that people might still have these outdated stereotypes, beliefs and biases in mind and ensure they do not contribute to gender inequalities in their workplaces. As such, employees should be encouraged to make decisions based on individual merit and abilities rather than assuming certain behaviours are inherently male or female.

The importance of distinguishing gender and biological Sex: our study emphasises the need to distinguish between gender identity and biological sex when studying economic decision-making. Companies and organisations should consider this distinction when designing policies and programmes related to diversity and inclusion, as it can help provide a more accurate understanding of how gender-related factors influence behaviour.

Inclusivity and representation matter: we included transgender and non-binary participants to ensure a more comprehensive representation of society. This serves as a reminder to companies and organisations to prioritise inclusivity and diversity in their research, workforce, and decision-making processes to reflect better the diverse perspectives and experiences of their employees and customers.

Economic behavioural differences may be narrower than assumed: the study’s results suggest that, regardless of gender identity or biological sex, individuals may not exhibit significant differences in economic decision-making in the studied domains. This challenges previous assumptions and implies that economic behaviour may be more universal than previously thought. Companies and organisations should consider this when developing strategies related to employee motivation, incentives, and financial decision-making processes.

Society’s diversity goes beyond binary gender: Our pioneering economic experiment, including both transgender and cisgender participants, highlights the limited approach to measuring gender beyond a binary framework. Organisations should adapt by including at least a third gender category in their questionnaires for customers, employees, and other stakeholders to ensure everyone can accurately express their gender identity.


“On the robustness of gender differences in economic behavior” is published in Nature: Scientific Reports and Dr Helena Fornwagner’s University of Exeter profile can be found HERE.


Dr Helena FornwagnerDr Helena Fornwagner is a Lecturer in Economics in the Department of Economics at the University of Exeter Business School.

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