Bankruptcy

Can High Testosterone Levels Lead to a Person Filing Bankruptcy?

By Meaghan Olson

Ok, ok, maybe it’s not that dramatic… but a new study shows that high testosterone may lead to reckless spending.

A recent study by researchers at the University of Chicago and Northwestern University has discovered that men and women may shop differently for biological reasons ? and those reasons could also determine how you execute all major financial decisions.

Background: Testosterone & Risky Behavior

Scientists have known for some time that testosterone, the male sex hormone, is linked to risky behavior.

And, when the economy collapsed after what can be considered very risky behavior in speculative financial markets, researchers began to wonder whether financial behavior had any specific link to testosterone levels.

The Study: Business Students Make Decisions

The researchers noted that, while about 57% of male MBA students choose high-risk financial careers after graduation, only about 36% of female MBA students do.

Researchers chose about 500 male and female students pursuing their Masters in Business Administration (MBA) for their experiments.

After measuring testosterone levels in everyone, researchers found that about 90% of women and 31% of men had relatively low testosterone.

Researchers then offered participants a choice between a guaranteed monetary award and a high-risk lottery option with a potential for higher payoffs.

The Findings: Testosterone Leads to Risky Business

Perhaps unsurprisingly, the researchers found that those with higher levels of testosterone (10% of women and 69% of men) tended to choose the higher-risk financial options.

The Lesson: Partner Up for Big Decisions

So what does all this teach you as a consumer? A few lessons.

• Know thyself. While you may not want to actually check your testosterone levels, consider your history of financial decisions. If you have a past filled with risky moves, consider forcing yourself through a cool-down period before making major money decisions.
• Partner up. Studies have found that married couples tend to be more risk averse than single people, but even if you?re not settled down, you could benefit from a second opinion. Consult with a levelheaded friend when you?re considering major decisions.
• Question that gut instinct. It could, after all, just being a hormone flowing through your veins, promising a thrill if you take the plunge.

… purchase the full study

Are you reading this and nodding your head?

If you’ve been overspending thanks to high testosterone, or if you’ve just fallen behind on the bills, it may be time to examine whether filing bankruptcy could help you.

Full post as published by The Bankruptcy Blog on August 27, 2009 (boomark / email).