Weilong Zhang
Faculty of Economics
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CERF Fellow of Cohort 2024 - 2026
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Gender Differences in Stock Market Belief Updating
This study examines the heterogeneous belief updating rules regarding stock market returns using data from the Health and Retirement Study (HRS). By analysing survey responses that capture individuals' beliefs about blue-chip US stock performance in the next year, we investigate how actual stock market realizations influence the revision of these beliefs. Our findings reveal significant gender differences in belief updating behaviour. Specifically, men exhibit greater rigidity in maintaining their prior beliefs, even in the face of new stock market information, while women demonstrate more malleable and adaptive responses to stock market shocks. These results suggest that gender plays a critical role in how individuals process financial information and adjust their expectations, with potential implications for understanding differences in investment behaviour and risk-taking in the stock market.
Risk Preferences and Portfolio Choice: An Intra-household Perspective
Risk Preferences and Portfolio Choice: An Intra-household Perspective
We quantify how bargaining power is distributed when spouses make portfolio decisions together. We build a model in which each spouse has their own risk preference and must bargain with each other to make asset allocation decisions for the household. By structurally estimating the model using representative sample from Australia and Germany, we find a significant gender gap in household bargaining power: in Australia, the husband’s risk preference matters 44% more for the average household’s asset allocation than the wife’s; in Germany, the husband’s risk preference is twice as important as the wife’s. These gaps in bargaining power are partially explained by gender differences in income and employment status, but they are also due to gender effects. We provide further evidence that links the distribution of bargaining power to views on gender norms.
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