Cäzilia Loibl

Gender Differences in Investment Behavior

The objectives of this chapter are to identify significant personal and environmental factors that influence investment behavior and to specify the investment decision-making process, particularly with respect to female investors. It is expected that the results presented here will help readers to consider new approaches to investment education. Specifically, this chapter aims to: (a) explore differences between men and women in a variety of financial behaviors, investment decision-making process; (b) identify patterns of investment involvement and learning preferences; and (c) determine socio-economic and behavior factors that explain gender differences in specific investment behavior (portfolio diversification).

Know Your Subject: A Gendered Perspective on Investor Information Search

What causes men and women to behave differently in financial matters? Gender differences in financial decisions and behaviors have been well-documented in popular media and the managerial press. The academic literature supports the notion of gender differences in investing, pointing out that male investors tend to make the high-consequence financial decisions in households and are the more risk tolerant and self-confident investors. Yet few studies have empirically connected these conditions to differences in the information acquisition behavior of male and female investors. This paper examines whether differences exist in the information sources and the frequency of their use among male and female investors and identifies demographic and attitudinal characteristics that could cause differences in information search strategies.

Testing Strategies to Increase Saving and Retention in Individual Development Account Programs

In a series of field experiments we test whether saving and retention rates in a federally funded, matched savings program for low-income families – the Individual Development Account (IDA) program – can be improved through the introduction of program features inspired by behavioral economics. We partnered with eight IDA programs across the U.S. who agreed to randomly assign participants to different experimental conditions. We test the impact of four revenue-neutral changes in key program features: a) holding savers accountable for making savings deposits through phone calls before and after the deposit deadline, b) an increase in the frequency with which deposits are made from monthly to bi-weekly, c) the introduction of a lottery-based incentive structure, whereby match rates are determined in part by a lottery at the time of each deposit, and d) an increase in the savings match from

Financial Issues of Women

2 for every

Save at Home: Building Emergency Savings One Mortgage Payment at a Time

1 saved to

Investor information search

4 for every

Understanding the impact of employer‐provided financial education on workplace satisfaction

1 saved when half of the savings goal was reached. None of our four interventions had the desired effect of increasing savings. To explain the null findings, we speculate that liquidity constraints, rather than cognitive biases, were the primary impediment to saving.

Consumer Self-Confidence in Searching for Information

Women face a broad range of financial issues. These can be categorized as follows: (1) women’s financial literacy is lower than men’s, but women are aware of the deficit and are more likely to seek professional financial advice; (2) women’s investment behavior is influenced by emotional and behavioral factors that can benefit or hurt investment outcomes; (3) women within couples are more involved in financial decisions when their age, education, and income are similar to their husbands’; (4) low-income women try to make ends meet by combining high-cost lending with less accessible mainstream financial products; (5) poverty among older women is particularly challenging, and adversely affects their mental and physical health; (6) beyond the western world, microfinance interventions have led to women’s empowerment and that empowerment has led to their assuming greater roles in economic decision-making.

More Than a Penny Saved: Long‐Term Changes in Behavior Among Savings Program Participants

This chapter explores the potential of behaviorally motivated “mortgage reserve accounts” as an automated tool to build emergency savings for otherwise vulnerable low- and moderate-income (LMI) households purchasing their first homes. Financial shocks, such as involuntary unemployment or reduction in wages, and unexpected expenses, such as emergency furnace replacement or roof repairs, within the first few years of homeownership can derail the fragile financial foundation of LMI households and put them at risk of losing their homes through foreclosure. Most LMI households enter homeownership with little equity or residual savings—holding on average only

Accounting for the role of habit in regular saving

2,000 in liquid assets, including cash on hand and savings and checking accounts (Moulton et al. 2011; Van Zandt and Rohe 2011). Although homeowners are building equity through their monthly mortgage payments, that equity is not accessible for consumption until the loan balance falls below a leverageable threshold (typically, 80 percent of the value of the home). To the extent that extending homeownership to LMI households remains a policy goal, scalable strategies to offset the higher default risk of such mortgages become a critical, yet challenging, objective.