Bargaining over Risk

The Impact of Decision Power on Household Portfolios

Tomas Thörnqvist, Arna Vardardottir

Publikation: KonferencebidragPaperForskningpeer review

Resumé

This paper investigates the internal financial decision-making process of households by employing a unique panel dataset containing the disaggregated wealth of the entire Swedish population over seven years. We directly estimate the outside options of spouses that determine their decision power and utilize a source of exogenous variation in sex-specific labor demand to show that its
distribution among spouses is a driving force in the aggregation of spouses' preferences in financial decision making. As the decision power of female spouses grows, participation in the equity market decreases, participation in other risky asset markets increases, the share of wealth allocated to risky investments decreases, the riskiness of the portfolio decreases, and idiosyncratic risk decreases. We also study the effect of underdiversification on household welfare and find that women exert the in uence of their decision power to reduce the cost of underdiversification.
OriginalsprogEngelsk
Publikationsdato2014
Antal sider47
StatusUdgivet - 2014
BegivenhedThe 19th Annual Meetings of the Society of Labour Economists. SOLE 2014 - Renaissance Arlington Capital View, Arlington, VA, USA
Varighed: 2 maj 20143 maj 2014
Konferencens nummer: 19
http://www.sole-jole.org/2014.html

Konference

KonferenceThe 19th Annual Meetings of the Society of Labour Economists. SOLE 2014
Nummer19
LokationRenaissance Arlington Capital View
LandUSA
ByArlington, VA
Periode02/05/201403/05/2014
Internetadresse

Bibliografisk note

CBS Bibliotek har ikke adgang til materialet

Citer dette

Thörnqvist, T., & Vardardottir, A. (2014). Bargaining over Risk: The Impact of Decision Power on Household Portfolios. Afhandling præsenteret på The 19th Annual Meetings of the Society of Labour Economists. SOLE 2014, Arlington, VA, USA.
Thörnqvist, Tomas ; Vardardottir, Arna . / Bargaining over Risk : The Impact of Decision Power on Household Portfolios. Afhandling præsenteret på The 19th Annual Meetings of the Society of Labour Economists. SOLE 2014, Arlington, VA, USA.47 s.
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Thörnqvist, T & Vardardottir, A 2014, 'Bargaining over Risk: The Impact of Decision Power on Household Portfolios' Paper fremlagt ved The 19th Annual Meetings of the Society of Labour Economists. SOLE 2014, Arlington, VA, USA, 02/05/2014 - 03/05/2014, .

Bargaining over Risk : The Impact of Decision Power on Household Portfolios. / Thörnqvist, Tomas; Vardardottir, Arna .

2014. Afhandling præsenteret på The 19th Annual Meetings of the Society of Labour Economists. SOLE 2014, Arlington, VA, USA.

Publikation: KonferencebidragPaperForskningpeer review

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AB - This paper investigates the internal financial decision-making process of households by employing a unique panel dataset containing the disaggregated wealth of the entire Swedish population over seven years. We directly estimate the outside options of spouses that determine their decision power and utilize a source of exogenous variation in sex-specific labor demand to show that itsdistribution among spouses is a driving force in the aggregation of spouses' preferences in financial decision making. As the decision power of female spouses grows, participation in the equity market decreases, participation in other risky asset markets increases, the share of wealth allocated to risky investments decreases, the riskiness of the portfolio decreases, and idiosyncratic risk decreases. We also study the effect of underdiversification on household welfare and find that women exert the in uence of their decision power to reduce the cost of underdiversification.

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Thörnqvist T, Vardardottir A. Bargaining over Risk: The Impact of Decision Power on Household Portfolios. 2014. Afhandling præsenteret på The 19th Annual Meetings of the Society of Labour Economists. SOLE 2014, Arlington, VA, USA.