Thérèse Lind in her office at LiU. Photo credit: Mikael Sönne
Relatively big differencies
Two of the four essays in Thérèse Lind’s doctoral thesis in behavioural economics Financial Literacy, Motivated Reasoning, and Gender describe the differences between women and men in economic knowledge, and suggest explanations.
She has used a questionnaire study and carried out experiments that show than men in general have better knowledge of fundamental economics. One of the factors studied was how well people understand important concepts such as inflation, return on investment, and financial risk. The differences she found are relatively large, about one level on an 8-level scale.
“I was surprised by the large difference. Women are well-integrated into the financial sector, and more women than men study at university. The differences must have another explanation”, says Thérèse.
Thérèse’s work also shows that men have higher self-confidence in economic matters, and that women in general are more insecure and anxious when it comes to finance. This may have considerable significance for one’s general feeling of well-being.
Thérèse Lind with her thesis.
The importance of education
The differences may have a major effect over a lifetime. The better financial knowledge a person has, the more sensible are the financial decisions he or she tends to make. This may be expressed as having a larger savings buffer, putting more away into a retirement fund, and a more secure financial situation – differences that can have major effects with time, and not just a consequence of men in general having a higher salary.
So why is this? In the thesis, Thérèse Lind suggests that women experience a “stereotype threat”, in matters of finance – in other words, the image that economics is primarily a sphere that men deal with remains firm. This may cause women to more or less consciously hesitate to get involved in matters of personal finance.
Both men and women find personal finance rather difficult and troublesome, and this may reinforce a stereotype threat. At the same time, women report a generally lower interest in financial matters.
What can be done about this difference in knowledge?
“I’m convinced that early education about economics at school is extremely important. We must increase both knowledge and self-confidence about financial questions, and it is important that these two are addressed together. It’s difficult to achieve a permanent improvement in adults’ level of knowledge. Female role models, such as female financial officers and stock market bloggers, can also play a role.”
In the third essay in the thesis, Thérèse Lind investigates whether people prefer to receive money in a lump sum or in instalments spread over time. She examines the same dichotomy with respect to payments. Such preferences may play a major role in everyday decisions, and influence the financial situation of people in the long term. It is most common that people prefer both to receive and pay out money as a lump sum on a single occasion.
The fourth essay deals with a phenomenon known as “motivated reasoning” and demonstrates that our opinions influence how we interpret facts in controversial topics. A previous article about this study is available at: We´re poor at interpreting immigrant facts