Download or read book Information Sharing and Stock Market Participation written by Geng Li and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Value of Connections written by Olga Balakina and published by . This book was released on 2019 with total page 73 pages. Available in PDF, EPUB and Kindle. Book excerpt: We introduce an equilibrium model of the stock market participation rate with a social network. We study how information sharing through a network affects the decision to enter the stock market and how social connectivity interacts with individual income and financial literacy to create heterogeneity in stock market participation levels. We analyze how the equilibrium participation level depends on the intensity of social interactions, and provide an algorithm for finding the equilibrium stock market participation level. We test the predictions from the model using Facebook county-level connectivity data. We find the model with social networks outperforms standard models without networks in predicting heterogeneity of equilibrium stock market participation over the income distribution, explaining non-participation among wealthy agents.
Download or read book The Geography of Stock Market Participation written by and published by . This book was released on 2004 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Stock Market Participation written by Adrian Schmid and published by . This book was released on 2019-07-13 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Academic Paper from the year 2014 in the subject Business economics - Investment and Finance, grade: 1.3, University of Frankfurt (Main), language: English, abstract: The field of household finance is confronted with the phenomena called "stock market participation puzzle" (Haliassos, 2003) which describes that most households do not hold stocks, despite that there are higher expected returns on stocks than on risk free assets (Haliassos, 2003). According to Haliassos and Bertaut (1995), 75% of households in the United States do not own stocks directly although returns on equity exceed the returns on risk free assets. This issue does not only concern households themselves, financial intermediaries, and stock issuers. It is also relevant for questions concerning privatisation, asset pricing, and tax rates on capital gains (Haliassos and Bertaut, 1995). The participation rate can directly affect the equity premium as argued by Mankiw and Zeldes (1991), and Heaton and Lucas (1999). Stock market participation in this seminar thesis refers to households participating in the market by holding stocks, excluding retirement accounts. The purpose is to demonstrate five factors discussed in financial literature that contribute to solve the stock market participation puzzle or reasons why limited stock market participation can be observed: Deviation from standard expected utility (Haliassos, 2003; Epstein and Zin, 1990; Haliassos and Hassapis, 1999; Diecidue and Wakker, 2001; Haliassos and Bertaut, 1995), more restricted borrowing constraints (Constantinides, Donaldson, and Mehra, 2002; Cocco, Gomes, and Maenhout, 2005; Haliassos, 2003), participation and entry costs (Guiso and Japelli, 2004; Gollier, 2002; Haliassos and Michaelides, 2003; Paiella, 2001; Vissing-Jorgensen, 2002; Haliassos, 2003), lack of financial awareness (Guiso and Jappelli, 2004), and financial illiteracy (van Rooij, Lusardi, and Alessie, 2007; Arrondel, Debbich, and Savignac, 2012; King and Leape, 1987).
Download or read book Social Interaction and Stock Market Participation written by Jeffrey D. Kubik and published by . This book was released on 2009 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate the idea that stock-market participation is influenced by social interaction. We build a simple model in which any given quot;socialquot; investor finds it more attractive to invest in the market when the participation rate among his peers is higher. The model predicts higher participation rates among social investors than among quot;non-socialsquot;. It also admits the possibility of multiple social equilibria. We then test the theory using data from the Health and Retirement Study. Social households-defined as those who interact with their neighbors, or who attend church-are indeed substantially more likely to invest in the stock market than non-social households, controlling for other factors like wealth, race, education and risk tolerance. Moreover, consistent with a peer-effects story, the impact of sociability is stronger in states where stock-market participation rates are higher.
Download or read book Social Interaction and Stock market Participation written by Harrison Hong and published by . This book was released on 2001 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate the idea that stock-market participation is influenced by social interaction. We build a simple model in which any given 'social' investor finds it more attractive to invest in the market when the participation rate among his peers is higher. The model predicts higher participation rates among social investors than among 'non-socials'. It also admits the possibility of multiple social equilibria. We then test the theory using data from the Health and Retirement Study. Social households - defined as those who interact with their neighbors, or who attend church - are indeed substantially more likely to invest in the stock market than non-social households, controlling for other factors like wealth, race, education and risk tolerance. Moreover, consistent with a peer-effects story, the impact of sociability is stronger in states where stock-market participation rates are higher
Download or read book Stock Market Participation Portfolio Choice and Pensions Over the Life cycle written by Steffan G. Ball and published by . This book was released on 2008 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Handbook of Consumer Finance Research written by Jing Jian Xiao and published by Springer. This book was released on 2016-05-30 with total page 379 pages. Available in PDF, EPUB and Kindle. Book excerpt: This second edition of the authoritative resource summarizes the state of consumer finance research across disciplines for expert findings on—and strategies for enhancing—consumers’ economic health. New and revised chapters offer current research insights into familiar concepts (retirement saving, bankruptcy, marriage and finance) as well as the latest findings in emerging areas, including healthcare costs, online shopping, financial therapy, and the neuroscience behind buyer behavior. The expanded coverage also reviews economic challenges of diverse populations such as ethnic groups, youth, older adults, and entrepreneurs, reflecting the ubiquity of monetary issues and concerns. Underlying all chapters is the increasing importance of financial literacy training and other large-scale interventions in an era of economic transition. Among the topics covered: Consumer financial capability and well-being. Advancing financial literacy education using a framework for evaluation. Financial coaching: defining an emerging field. Consumer finance of low-income families. Financial parenting: promoting financial self-reliance of young consumers. Financial sustainability and personal finance education. Accessibly written for researchers and practitioners, this Second Edition of the Handbook of Consumer Finance Research will interest professionals involved in improving consumers’ fiscal competence. It also makes a worthwhile text for graduate and advanced undergraduate courses in economics, family and consumer studies, and related fields.
Download or read book Asset Market Participation and Portfolio Choice Over the Life cycle written by Andreas Fagereng and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the life cycle of portfolio allocation following for 15 years a large random sample of Norwegian households using error-free data on all components of households' investments drawn from the Tax Registry. Both, participation in the stock market and the portfolio share in stocks, have important life cycle patterns. Participation is limited at all ages but follows a hump-shaped profile which peaks around retirement; the share invested in stocks among the participants is high and flat for the young but investors start reducing it as retirement comes into sight. Our data suggest a double adjustment as people age: a rebalancing of the portfolio away from stocks as they approach retirement, and stock market exit after retirement. Existing calibrated life cycle models can account for the first behavior but not the second. We show that incorporating in these models a reasonable per period participation cost can generate limited participation among the young but not enough exit from the stock market among the elderly. Adding also a small probability of a large loss when investing in stocks, produces a joint pattern of participation and of the risky asset share that resembles the one observed in the data. A structural estimation of the relevant parameters that target simultaneously the portfolio, participation and asset accumulation age profiles of the model reveals that the parameter combination that fits the data best is one with a relatively large risk aversion, small participation cost and a yearly large loss probability in line with the frequency of stock market crashes in Norway.
Download or read book Neighbors Matter written by Jeffrey R. Brown and published by . This book was released on 2008 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides direct evidence of a causal link between the stock market participation of individuals and that of the other members of the community in which they reside. We first establish the presence of a robust positive correlation between the probability that an individual owns stock and the level of stock market participation of one's community, as measured by reporting dividend income on tax returns. We also show that conditional on owning stock, an individual is likely to own more (relative to income) when community ownership is higher. These results are robust to a wide range of individual and community controls, including measures of the importance of local firms (which have large independent effects), and specification checks to ensure that the relation is not driven solely by ownership of stock of one's employer. We then provide evidence that this community effect is at least partially driven by word of mouth by showing that the effect is stronger in more sociable communities. To demonstrate causality, we employ a novel instrumental variables strategy that uses the stock ownership rates of the non-local parents of one's local peers to instrument for community ownership. Further, we also control for heterogeneity in risk preferences by including individual-level fixed effects. We conclude that a ten percentage-point increase in equity market participation of the members of one's community makes it four to five percentage points more like the individual will invest in stocks. We also provide estimates of a direct parental effect, as well as suggestive evidence that one's home state may have lasting effects on one's stock market participation.
Download or read book Financial Literacy in Europe written by Gianni Nicolini and published by Routledge. This book was released on 2019-01-23 with total page 284 pages. Available in PDF, EPUB and Kindle. Book excerpt: Are people ready to take pivotal financial decisions like choosing a mortgage, saving for retirement, or investing their savings? How does the degree of knowledge about financial products and services affect the quality of their choices? Can financial fraud be prevented by increasing consumer financial knowledge? Financial Literacy in Europe addresses these important questions and more. In the first part, the author investigates the concept of financial literacy by analyzing its components and comparing different definitions from previous studies. This then forms a comprehensive measure of financial literacy to be applied in empirical studies that analyze the role of financial literacy in explaining consumers’ financial behaviors. In the second part of the study, the author uses brand new data collected by the Consumer Finance Research Center (CFRC) from several European countries (the UK, Germany, France, Italy, Sweden, and Spain) to assess financial literacy in Europe and highlight similarities and differences across countries. Filling an important gap in previous research, the author develops a rigorous approach in the measurement of financial literacy in order to examine European financial literacy issues in great detail. This book, therefore, is a useful resource for assessing the effectiveness of single financial education programs or planning national strategies on financial education. It can also support policy makers in developing financial regulation and consumer protection strategies, considering the consumer perspective and their ability to deal with financial markets and institutions.
Download or read book The Geography of Stock Market Participation written by Paul A. Smith and published by . This book was released on 2008 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper is the first to investigate the importance of geography in explaining equity market participation. We provide evidence to support two distinct local area effects. The first is a community ownership effect, that is, individuals are influenced by the investment behavior of members of their community. Specifically, a ten percentage-point increase in equity market participation of the members of one's community makes it two percentage points more likely that the individual will invest in stocks. We find further evidence that the influence of community members is strongest for less financially sophisticated households and strongest within quot;peer groupsquot; as defined by age and income categories. The second is that proximity to publicly-traded firms also increases equity market participation. In particular, the presence of publicly-traded firms within 50 miles and the share of U.S. market value headquartered within the community are significantly correlated with equity ownership of individuals. These results are quite robust, holding up in the presence of a wide range of individual and community controls, instrumental variables estimation, the inclusion of individual fixed effects, and specification checks to rule out that the relations are driven solely by ownership of the stock of one's employer.
Download or read book The Geography of Stock Market Participation written by Jeffrey R. Brown and published by . This book was released on 2004 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This paper is the first to investigate the importance of geography in explaining equity market participation. We provide evidence to support two distinct local area effects. The first is a community ownership effect, that is, individuals are influenced by the investment behavior of members of their community. Specifically, a ten percentage-point increase in equity market participation of the members of one's community makes it two percentage points more likely that the individual will invest in stocks. We find further evidence that the influence of community members is strongest for less financially sophisticated households and strongest within peer groups' as defined by age and income categories. The second is that proximity to publicly-traded firms also increases equity market participation. In particular, the presence of publicly-traded firms within 50 miles and the share of U.S. market value headquartered within the community are significantly correlated with equity ownership of individuals. These results are quite robust, holding up in the presence of a wide range of individual and community controls, instrumental variables estimation, the inclusion of individual fixed effects, and specification checks to rule out that the relations are driven solely by ownership of the stock of one's employer"--National Bureau of Economic Research web site
Download or read book Social Interaction and Stock Market Participation written by Sarah Brown and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Social Communication Information Aggregation and New Investor Participation written by Yu-Jane Liu and published by . This book was released on 2018 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper proposes an approach that demands fewer data to estimate the effect of social interaction on stock market participation. Using data available publicly, we construct a sequence of measures of aggregated stock returns that are based on the same stock returns information and embed social interaction increasingly through different weighting functions. We show that this sequence of aggregated stock returns measures has increased explanatory power in new investors' decisions to participate in the stock market. The effect is stronger when social interaction is stronger or social communication costs are lower, when the social information is positive and during bull markets. Our approach potentially is applicable to study the effects of social interactions in the aggregate in a wide range of contexts.
Download or read book Stockholding in Europe written by L. Guiso and published by Palgrave Macmillan. This book was released on 2002-11-15 with total page 232 pages. Available in PDF, EPUB and Kindle. Book excerpt: The past decade has been a time of drastic developments, both in financial markets and in related academic research. Among the most striking developments are the expanded stockholder base, the increased popularity of mutual funds among households, and the growing importance of private pension funds. Developments in Europe mirror to a large extent the spread of equity culture in the United States, but with lower levels of involvement and interesting differences across European countries. This book, intended for a wide audience of students, practitioners, and policy makers, provides the theoretical and methodological background necessary for analysis of stockholding behaviour, and presents empirical studies that use the most comprehensive household-level databases to identify determinants of stockholding in five major European countries.
Download or read book Shared Capitalism at Work written by Douglas L. Kruse and published by University of Chicago Press. This book was released on 2010-06-15 with total page 433 pages. Available in PDF, EPUB and Kindle. Book excerpt: The historical relationship between capital and labor has evolved in the past few decades. One particularly noteworthy development is the rise of shared capitalism, a system in which workers have become partial owners of their firms and thus, in effect, both employees and stockholders. Profit sharing arrangements and gain-sharing bonuses, which tie compensation directly to a firm’s performance, also reflect this new attitude toward labor. Shared Capitalism at Work analyzes the effects of this trend on workers and firms. The contributors focus on four main areas: the fraction of firms that participate in shared capitalism programs in the United States and abroad, the factors that enable these firms to overcome classic free rider and risk problems, the effect of shared capitalism on firm performance, and the impact of shared capitalism on worker well-being. This volume provides essential studies for understanding the increasingly important role of shared capitalism in the modern workplace.
