Dynamic Stock Market Participation of Households

Publikation: Working paperForskning

Resumé

This paper develops and estimates a dynamic model of stock market participation, where consumers’ decisions regarding stock market participation are influenced by participation costs. The practical significance of the participation costs is considered as being a channel through which financial education programs can affect consumers’ investment decisions. Using household data from the Panel Study of Income Dynamics, I estimate the magnitude of the participation cost, allowing for individual heterogeneity in it. The results show the average stock market articipation cost is about 5% of labor income; however, it varies substantially over consumers’ life. The model successfully predicts the level of the observed articipation rate and the increasing pattern of stock market participation over the consumers’ life cycle.
OriginalsprogEngelsk
Udgivelses stedMünich
UdgiverMünich University
Antal sider34
StatusUdgivet - 2011
NavnMPRA Paper
Nummer35310

Emneord

  • Portfolio Choice
  • Stock market Participation
  • Dynamic Models
  • Discrete Choice Models
  • Panel Data

Citer dette

Khorunzhina, N. (2011). Dynamic Stock Market Participation of Households. Münich: Münich University. MPRA Paper, Nr. 35310
Khorunzhina, Natalia. / Dynamic Stock Market Participation of Households. Münich : Münich University, 2011. (MPRA Paper; Nr. 35310).
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Dynamic Stock Market Participation of Households. / Khorunzhina, Natalia.

Münich : Münich University, 2011.

Publikation: Working paperForskning

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