I have no interest here in what factors aside from age influence female sexual desire -- you can figure this out on your own too, but the literature does provide hard data that a female's personality, especially how prone she is to depression, affects her level of desire and activity. I'm only going to show that female desire and activity decrease with age -- so if you didn't just land here from Mars, feel free to go do something more productive with your time.
Sexual activity decreases with age
From this paper:
"In the over-40 category, the frequency of sex is much lower. Among older women the median amount of sex is once a month, while for males it is 2-3 times a month."
"A third of over-40s say they are celibate."
"Among the under-40s 84% of US women and 70% of US men had at most one sexual partner in the previous year"
"40% of American females over the age of 40 did not have sexual intercourse in the previous year. The figure for American males is 20%."
"As might be expected, Table 5 finds that aging reduces sexual activity."
Sexual desire decreases with age
Lest you make the mistake of thinking that a female's actual amount of sex and her desired amount of sex are outta-whack...
From this paper:
The evidence indicates that a woman's sexual function declines with age. This decline begins in a woman's late 20s to late 30s. Specifically, desire, frequency of orgasm, and frequency of sexual intercourse decrease with age. However, it is not clear whether arousal decreases or remains relatively constant. In longitudinal studies, decline in women's sexual function has also been detected, but patterns of stability and improved sexual function have also been observed for short periods of time.
"It is reasonable to conclude that for most women sexual function and activities decline gradually with age, making these changes difficult to detect over short periods of time."
"There is evidence that as women get older, the relative importance of sex may decrease."
From this paper:
The longest-duration population-based study, the Melbourne Women's Midlife Health Project, found a significant decrease of women's desire, arousal, orgasm and frequency of sexual activity and a significant increase in vaginal dryness/dyspareunia throughout the menopausal transition. Both age and declining estradiol levels had significant detrimental effects on sexual functioning, libido and sexual responsiveness (arousal, sexual pleasure and orgasm). Testosterone, which is already at a low level in middle-aged women in comparison with younger women, as well as dehydroepiandrosterone sulfate, may play a role in psychosexual well-being, even though it is difficult to significantly correlate plasma levels to sexual function in cross-sectional and longitudinal studies.
It is, indeed, a matter of fact that bilateral ovariectomy (both premenopausally and postmenopausally) leads to a sudden 50% fall in circulating testosterone levels, and androgens have peculiar effect on central and peripheral circuitries involved in the physiology of sexual response.
"Desire difficulty is the most common sexual complaint experienced by women; the proportion of women with low desire increases with age."
You get the idea. I don't have anything to add, except an emphasis that testosterone in females tanks in middle age. It doesn't matter if feminizing hormones drop over the lifespan -- that per se doesn't make a woman more masculine. It would do so only if masculinizing hormone levels stayed the same, but they are also plummeting.
An interesting but separate question is why this folktale is so popular. It's obvious why it's popular among desperate adolescent males: it gives them hope that, some day, females will be horny enough that guys won't have to try that hard to get laid. I don't think most women buy into the folktale, but those who do are at or approaching middle age, when their bitterness towards men is at its peak. (In fact, I challenge you to find a college freshman who would be convinced by this folktale.) The folktale allows these women to try to take men down a peg -- "How does it feel to have your libido dropping while ours is rising?" Ha, if only it were true.
Women over 30, who are becoming or have become invisible to the male sex, should take consolation in knowing that at least during their invisible phase, they aren't fueled by boy-crazy hormones. The average male is most invisible during adolescence, when getting the opposite sex's attention is the only thing on his mind -- now that's fucked up. But we get over it, and bitter women should too.
* Assuming they are above the 98th percentile (or +2 standard deviations) for both IQ and tough-mindedness, which are independent.