Investors Show Gender Bias Against the Advice of Women Professionals

A new study by researchers at the Yale School of Management and Columbia Business School finds that the advice given by women in investment positions to clients is not valued as high as advice given by male investment professionals.

The authors collected data from a private online platform where investment professionals share recommendations to buy or sell a given stock. They examined 3,520 recommendations by 1,550 individuals from 2008 through 2013. The platform does not explicitly identify recommenders by gender, but in many cases one could infer from first names whether a recommender was likely to be a man or a woman.

The web platform provided a two-stage evaluation process. In the first stage, users click on recommendations they are interested in learning more about. In the second, they evaluate the recommendation, rating it on a five-point scale and leaving comments. The researchers found that recommendations submitted by people with typically “feminine” names received 25 percent fewer clicks than those submitted by individuals with “male-sounding” names.

“We found that financial professionals are more likely to pay attention to investment recommendations when they think that the person offering the recommendation is a man,” said Tristan Botelho, assistant professor of organizational behavior at the Yale School of Management and co-author of the study. “It shows that gender bias even exists in an industry, in this case the financial market, where individuals and firms are extremely performance-minded.”

The study was co-authored by Mabel Abraham, an assistant professor of management at Columbia Business School. She joined the faculty there in 2015. Dr. Abraham is a magna cum laude graduate of Providence College in Rhode Island, where she majored in mathematics. She earned a master’s degree and a Ph.D. in management from the Massachusetts Institute of Technology.

The study, “Pursuing Quality: How Search Costs and Uncertainty Magnify Gender-based Double Standards in a Multistage Evaluation Process,” was published in the journal Administrative Science Quarterly. It may be accessed here.