Women Aren't Bad Traders, They Just Don't Have Enough Testosterone

Illustration for article titled Women Arent Bad Traders, They Just Dont Have Enough Testosterone

Trust us, it's not sexism that keeps women out finance, it's science. Or so says the Economist.

The Economist makes the classic correlation-equals-causation mistake in its recent article that reports a study from Chicago that found female MBAs with more testosterone in their saliva tended to engage in riskier gambling behavior and went on to choose high-risk careers like finance.

Naturally, the Economist bills this as justification for the lack of women in finance:

THAT the risk-taking end of the financial industry is dominated by men is unarguable. But does it discriminate against women merely because they are women? Well, it might. But a piece of research just published in the Proceedings of the National Academy of Sciences by Paola Sapienza of Northwestern University, near Chicago, suggests an alternative-that it is not a person's sex, per se, that is the basis for discrimination, but the level of his or her testosterone.


But the study didn't definitively find that it was testosterone that caused risky behavior, just that it correlated. It also didn't find that higher levels of testosterone intersected with riskier behavior in men. It was only a matter of time before someone used this study, a biological finding, to justify gender inequalities. What's more, as we've see with the financial crisis, it isn't necessarily a good thing to have high-risk individuals, men or women, dominating the culture of the financial sector. Many of the reforms that have been proposed have been examining how much risk in the financial sector is a good thing.

Risky business [Economist]
Study finds women with higher levels of testosterone more likely to take financial risks [AP]

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Erin Gloria Ryan

I've been on the floor of a major exchange, a place where "normal" people aren't usually allowed. And let me tell you, they're not lying about the testosterone. You can smell it. I'd imagine that any woman working there would eventually absorb testosterone by osmosis. I felt like I had five o'clock shadow by the time I left.

It's more masculine than a testicle down there.

However, I will say that I know a few women who are successful investment bankers, and they're no less feminine than any other woman. Additionally, we have a few very successful female brokers in my office. And finally, while progress in the financial world may be slow going for women, take a look at Sheila Bair, Meredith Whitney, and Sallie Krawchek. Say what you will about their management styles, but you can't argue that they wouldn't be where they are forty years ago.