Beyond X and Y Chromosomes: Exploring Biopsychosocial and Environmental Factors of Gendered Differences in Household Finances

This study utilizes the 1997 National Longitudinal Survey of Youth to examine how gender effects on risk tolerance are mediated by personality traits. Biopsychosocial factors include: gender, race, census region of residence, and the Big Five personality traits. Environmental factors include income and education. Under the assumptions of the Adaptive Market Hypothesis by Andrew Lo, this study considers biological, psychological and sociological factors as well as evolutionary impacts on financial behaviors. The objective of the study is to establish personality and environmental factors as mediators between gender, race, region and household variables. The first phase was to examine the relationships between Biopsychosocial and Environmental Factors and Household Financials for single participants at age 20 and 25. OLS model results showed that when including personality traits with gender, race and regional variables, the gender effect on assets at 25 becomes insignificant. The second phase of the study was to find interactions within psychosocial and environmental factors. Results showed significant biopsychosocial effects on environmental factors. Within biopsychosocial factors, results also indicated biosocial effects on personality trait scores. In the final phase, SEM mediation analysis found significant total and partial mediation effects of personality and environmental factors within the relationship between biosocial and household financial variables. Based on previous studies that have established relationships between household finances and risk tolerance, the theoretical effects of Openness, education and gender on risk tolerance are discussed.