# Men Trade 45% More Than Women and Earn Less for It

Cite as: Gorak, R. (2026). Men Trade 45% More Than Women and Earn Less for It. Tradicted. https://www.tradicted.com/research/barber-overconfidence-2001/
Paper: Brad M. Barber and Terrance Odean — *Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment*
Published in: Quarterly Journal of Economics (2001)
Original: https://faculty.haas.berkeley.edu/odean/papers%20current%20versions/boyswillbeboys.pdf

Key finding: Men traded 45 percent more than women from February 1991 through January 1997, reducing their net returns by 2.65 percentage points per year versus 1.72 percentage points for women.

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Overconfidence causes investors to overestimate the precision of their knowledge, leading to excessive trading. Barber and Odean (2001) test this prediction in *Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment*. Using 37,664 U.S. discount brokerage accounts from February 1991 through January 1997, they found men traded 45 percent more than women. Trading reduced men's net returns by 2.65 percentage points per year versus 1.72 percentage points for women.

## What the Study Found

Men turned their common stock portfolios over approximately 77 percent annually; women turned theirs over approximately 53 percent. Men's net own-benchmark returns fell 0.221 percent per month; women's fell 0.143 percent per month — a gap of 0.94 percentage points annually. Single men traded 67 percent more than single women and reduced their returns by 1.44 percentage points per year more. After controlling for market risk and firm size, women earned net returns 9 basis points per month higher than men. The stocks men bought underperformed the stocks they sold by 20 basis points per month; the same gap for women was 17 basis points.

## Methodology

The data came from 78,000 household accounts at a large U.S. discount brokerage firm. Gender was identified for 37,664 households using demographic data from Infobase Inc. as of June 1997; 79 percent were male-headed accounts. The study period ran from February 1991 through January 1997, yielding 72 months of monthly portfolio and trade data. Key controls included age, marital status, income, presence of children, market beta, and the Fama-French SMB size factor.

## Key Statistics

| Metric | Finding | Context |
|---|---|---|
| Men's annual portfolio turnover | ~77% | All male households, Feb 1991–Jan 1997 |
| Women's annual portfolio turnover | ~53% | All female households, Feb 1991–Jan 1997 |
| Men trade more than women | 45% more | All households |
| Net return drag, men | 2.65 pp/year | vs. own beginning-of-year portfolio |
| Net return drag, women | 1.72 pp/year | vs. own beginning-of-year portfolio |
| Gender performance gap (net) | 0.94 pp/year | Men underperform women |
| Single men vs. single women, trading | 67% more | Single households only |
| Single men net return drag | 1.44 pp/year more | vs. single women |
| Risk-adjusted gender gap (2-factor) | 9 bps/month (1.1%/year) | Market + SMB controlled; women outperform |
| Men's purchases vs. sales | −20 bps/month | Stocks bought underperform stocks sold |
| Net return formula | (1 + R_net) = (1 + R_gross)(1 − c_sell)/(1 + c_buy) | Adjusts gross return for bid-ask spread and commissions |

## Why This Matters

By partitioning on gender, the study achieves a sharper test of overconfidence models than approaches relying on self-reported investor beliefs. The large sample size allows demographic controls that confirm the gender effect is not a proxy for income, age, or marital status differences. Risk-aversion differences between genders exist but would predict different portfolio compositions, not necessarily different trading frequencies — overconfidence uniquely explains the frequency channel. Practitioners designing trading cost structures or investor education programs have direct empirical support for targeting transaction frequency as a performance lever. The mechanism is trading frequency, which is measurable in your own account. A [trading journal](/trading-journal/) tracks turnover against net return so the pattern in this study is testable on your own trades.

## FAQ

### How much did trading reduce returns for the most overconfident investors?

67 percent — that is how much more single men traded relative to single women. Single men reduced their net returns by 1.44 percentage points per year more than single women. The performance gap between single men and single women exceeded that between married men and married women.

### How did Barber and Odean control for risk differences between men and women?

9 basis points per month is how much women outperformed men in net returns after a two-factor regression. Barber and Odean controlled for market beta and the Fama-French SMB size factor. Men held smaller, higher-beta stocks that performed well in the sample period. After a three-factor model added book-to-market, women outperformed by 12 basis points per month.

### Did men make systematically worse stock picks than women?

20 basis points per month — that is how much men's purchased stocks underperformed the stocks they sold. Women's gap was 17 basis points. The difference between men and women was not statistically significant. Men underperformed women due to trading more often, not due to inferior security selection ability.

### What survey evidence supported the overconfidence hypothesis?

2.8 percent is the margin by which men expected to outperform the market. Women expected 2.1 percent. Barber and Odean sourced these figures from 15 Gallup/PaineWebber surveys, June 1998 through January 2000. Both groups expected their portfolios to beat the market; men's margin was significantly larger (t = 3.3).

## Source

Barber, B. M., and Odean, T. (2001). Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment. *Quarterly Journal of Economics*, 116(1), 261–292.

[Read the full paper →](https://faculty.haas.berkeley.edu/odean/papers%20current%20versions/boyswillbeboys.pdf)