Handling Risk: Testosterone and Risk Preference, Evidence from Dhaka, Bangladesh

The relationship between testosterone and risk aversion is of increasing interest in the experimental economics. Using the ratio of the second digit to the fourth digit (2D:4D) as a rough indicator of level of prenatal testosterone exposure, this study attempts to replicate recent results from Garbarino et al., (2011), which found that individuals with digit ratios above the sample average were significantly more risk averse, and individuals with digit ratios one standard deviation below the sample average were significantly more risk seeking in a subject pool of male and female Caucasian students. Here, a subject pool from Dhaka, Bangladesh, is used. The results are somewhat mixed, but similar to the findings in Garbarino et al (2011). This study also controlled for other factors that have been shown to contribute to risk preference in an e↵ort to make sure any relationship found between digit-ratio and risk aversion did not arise due to omitted variables