The attitudes toward risk of women and men entrepreneurs in micro- and small enterprises
(MSEs) are analyzed, and the factors that influence attitude toward risk of MSE owners are
investigated. The empirical analysis first uses the moment-based approach proposed by Antle
(1987) to estimate the risk preferences of men and women entrepreneurs. Second, a regression
model is employed to understand the correlates of attitude toward risk and to decompose
gender differences in risk aversion using the Oaxaca-Blinder technique. The results clearly
indicate that MSE entrepreneurs are risk-averse with a relative risk premium of 1.5%. Women
entrepreneurs are slightly more risk-averse than are men entrepreneurs. Regression estimates
show that entrepreneurs’ attitude toward risk is significantly correlated with age and
experience, marital status, education level, financial literacy, wealth, sector, and business
type. The gender difference in risk aversion is significantly explained by the predictor variables
while the unexplained component is insignificant. This suggests that gender differences in risk
preference are the result of disparities in socioeconomic factors rather than of biology.
