Risk preferences and sibling sex composition

Abstract

This article presents evidence on the malleability of preferences over monetary risk of men and women in the context of the family. I focus on sibling sex composition by estimating the causal effect of having a younger brother compared to a sister on the risk attitudes of the first-born child. Results show that women with a younger brother are significantly less risk averse than women with younger sisters. The effect wears off as the age difference increases. The sex of the second-born has a similar but smaller effect on men’s preferences, however, the effect is not statistically significant. The findings provide new causal evidence on how risk preferences are shaped by social environmental factors.