Women with high levels of testosterone are more likely to make risky financial decisions, according to research published this week. The finding, reported in Proceedings of the National Academy of Sciences, is another twist to the controversy over ‘traders’ testosterone’.

Women are generally more risk averse than men, says Dario Maestripieri, of the University of Chicago. Maestripieri’s team had 550 MBA students play financial computer games to determine how risky their behaviour was. They also measured the students’ levels of testosterone.

Higher levels of testosterone meant less aversion to risk in women, but not in men, they found. In addition, and perhaps unsurprisingly, testosterone levels and risk aversion appeared to predict career choice with those high in the former and low in the latter being more likely to choose risky careers in finance.

“This is the first study showing that gender differences in financial risk aversion have a biological basis, and that differences in testosterone levels between individuals can affect important aspects of economic behaviour and career decisions,” says Maestripieri (press release).

Previous research has linked testosterone levels to success in trading (see: The testosterone of trading). However, any female traders reading this should be dissuaded from artificially boosting their testosterone levels to compete in the markets; another study in women found that raising their levels of testosterone made no difference to how risky their behaviour was (see: Testosterone boost doesn’t fuel risky behaviour in women).

Some papers have inevitably managed to make this research about sex, given testosterone’s links to sex drive, and are suggesting that women who are risky may also be risqué.

When published, the PNAS article will be available here.

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