If you've been blaming reckless men for the collapse of America's leading investment houses and the plunging markets, you may be on to something. High levels of testosterone are correlated with riskier financial behavior, new research suggests.

Men with more of the sex hormone made riskier investments than guys with lower levels, according to a study published online yesterday in Evolution and Human Behavior. Just how much riskier? Those with 33 percent more testosterone than average men invested 10 percent more of their dough.

The findings are based on saliva samples from 98 male Harvard students taken before they played an investment game with $250 in real money. The students with more masculine facial features, such as prominent jaws and cheekbones, also were riskier with their cash, investing 6 percent more of it than their softer-featured peers. 

The connection between the findings and the downfall of investment firms, mortgage financers and insurers that began last year and reached a crescendo two weeks ago "is not that obvious," says Anna Dreber, a co-author of the study. But, she tells us, there are reasons to think that testosterone may have played a role.

Traders have been shown to make more money on days when their testosterone levels are higher, scientists reported earlier this year. Levels of the male sex hormone are known to rise when people win a sports competition; a male-dominated workplace such as a financial institution may perpetuate those elevated levels as colleagues strike gold and egg one another on, Dreber says.

Even the presence of women (how 'bout those evenings at Scores?) can ratchet up testosterone, adds Dreber, a doctoral candidate in economics at the Stockholm School of Economics who is a visiting researcher at Harvard.

So were those titans of Wall Street uber-men?

"Long-term, above-average testosterone levels may perhaps eventually lead to irrational risk-taking, and thus lower profits," Drebersays, noting the previous study of traders. "This is maybe what we see today."

The findings could also explain yesterday's 777-point plunge by the Dow. "People have been losing and their testosterone levels may have decreased, and therefore, they are more risk averse," Dreber says. 

The scientists didn’t study women, and while the fairer sex makes far less testosterone, those with more of it would likely behave similarly to men, Dreber says. A 2005 study showed that women made riskier bids on experimental auctions when they were menstruating and their levels of the female sex hormones estrogen and progesterone were lowest.

"Women tend to be more risk averse when it comes to financial gambles," Dreber notes. "They tend to trade less and that tends to be a better strategy. With more 'average women' trading, maybe the stock market would look different."

(Image by iStockphoto/Stephanie Horrocks)