In short, people are just plain crazy

Via Kevin Drum, I read this fascinating article by Virginia Postrel about how different groups deal with risk. It's all good stuff, but like Kevin, I found that this popped out at me:

For instance, 80 percent of high-scoring men would pick a 15 percent chance of $1 million over a sure $500, compared with only 38 percent of high-scoring women, 40 percent of low-scoring men and 25 percent of low-scoring women.

I think of myself as a pretty risk-averse person, financially speaking. I have my savings mostly in an ING account rather than the stock market. But this is just crazy! A million is a thousand thousands. Why the hell would anyone pass up a 15% chance at it for a measly $500 dollars? The sex difference is also very disturbing -- I don't really care whether it's biological or sociological -- it is a problem if there is this level of disparity between the ability to handle risk between the sexes.

And the tragic thing is, when confronted with the very bad risk to return of a lottery, many of the same folks would would pass up a 15% chance at a million for a safe $500 could probably be tempted into a flutter.