Peer evaluations of investment professionals fail on equality
New research confirms the belief held by many that men and women are not treated equally in peer evaluations of investment professionals.
It has found bias against women making investment recommendations even when their performance equals that of their male peers.
Researchers from the Columbia Business School and Yale School of Management studied the Real Investment Club, a private online platform that brings together hedge fund and mutual fund investment professionals to share their recommendations about stocks to buy and sell.
The recommendations are then evaluated in a two-step process. Firstly, the attention stage, deciding from a small amount of information whether it is worthy of more in-depth assessment. Then, the feedback stage, using more detailed information about the recommended investment.
The study found that those recommendations submitted by men were more likely to be viewed than those submitted by women, at the attention stage. There did not appear to be a disadvantage for women in the feedback stage.
"Evaluation processes are a foundation of most market and organizational settings, and their outcomes have significant economic implications," said Mabel Abraham, Assistant Professor of Management at Columbia Business School. "An individual's characteristic, like their gender, can have a major effect on evaluations, making them more of an art than a science."
The study recommends that to tackle inequality, organizations should minimize gender identification in the evaluation process. It also calls for the increase of minority groups for investment professionals platforms.
The full study is available here.
It has found bias against women making investment recommendations even when their performance equals that of their male peers.
Researchers from the Columbia Business School and Yale School of Management studied the Real Investment Club, a private online platform that brings together hedge fund and mutual fund investment professionals to share their recommendations about stocks to buy and sell.
The recommendations are then evaluated in a two-step process. Firstly, the attention stage, deciding from a small amount of information whether it is worthy of more in-depth assessment. Then, the feedback stage, using more detailed information about the recommended investment.
The study found that those recommendations submitted by men were more likely to be viewed than those submitted by women, at the attention stage. There did not appear to be a disadvantage for women in the feedback stage.
"Evaluation processes are a foundation of most market and organizational settings, and their outcomes have significant economic implications," said Mabel Abraham, Assistant Professor of Management at Columbia Business School. "An individual's characteristic, like their gender, can have a major effect on evaluations, making them more of an art than a science."
The study recommends that to tackle inequality, organizations should minimize gender identification in the evaluation process. It also calls for the increase of minority groups for investment professionals platforms.
The full study is available here.
