GENDER DIFFERENCE IN RISK AND CONFIDENCE PERCEPTION: IMPLEMENTATION WITH LOGIT MODEL

Abstract

Purpose - This study aims to understand individuals’ behaviors and perceptions regarding investment preferences. Specifically, it examines the differences in investors’ perceptions of “concerns about losing money due to investment decisions” and “confidence in their knowledge of portfolio creation and management” based on the gender variable. Methodology - The study utilizes survey data from 69 participants (29 female and 40 male). It employs logit models to analyze two dependent variables: (1) the stress level due to concerns about investment decisions and (2) confidence in portfolio management and financial knowledge. Gender is the key independent variable, with marginal effects calculated for unambiguous interpretation. Findings - The results indicate that gender has a statistically significant impact on both stress and confidence levels. Women are 21.2% more likely than males to experience stress due to concerns about investment decisions. Conversely, females are 18.5% less likely to feel confident about their financial knowledge and portfolio management abilities than males. These findings reflect the gender-based differences in risk perception and confidence. Conclusion -The study highlights the critical role of gender in shaping investment behaviors. Women tend to exhibit higher risk aversion and lower financial confidence than men. To address this disparity, targeted financial education programs and awareness initiatives are recommended to enhance women’s financial literacy and confidence. Bridging this gap can contribute to improved financial participation and decision-making among women.