Bargaining over Risk

The Impact of Decision Power on Household Portfolios

Tomas Thörnqvist, Arna Vardardottir

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

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.
Original languageEnglish
Publication date2014
Number of pages47
Publication statusPublished - 2014
EventThe 19th Annual Meetings of the Society of Labour Economists. SOLE 2014 - Renaissance Arlington Capital View, Arlington, VA, United States
Duration: 2 May 20143 May 2014
Conference number: 19
http://www.sole-jole.org/2014.html

Conference

ConferenceThe 19th Annual Meetings of the Society of Labour Economists. SOLE 2014
Number19
LocationRenaissance Arlington Capital View
CountryUnited States
CityArlington, VA
Period02/05/201403/05/2014
Internet address

Bibliographical note

CBS Library does not have access to the material

Cite this

Thörnqvist, T., & Vardardottir, A. (2014). Bargaining over Risk: The Impact of Decision Power on Household Portfolios. Paper presented at The 19th Annual Meetings of the Society of Labour Economists. SOLE 2014, Arlington, VA, United States.
Thörnqvist, Tomas ; Vardardottir, Arna . / Bargaining over Risk : The Impact of Decision Power on Household Portfolios. Paper presented at The 19th Annual Meetings of the Society of Labour Economists. SOLE 2014, Arlington, VA, United States.47 p.
@conference{9d8130ac0fd34a3ca832a0c37f01297b,
title = "Bargaining over Risk: The Impact of Decision Power on Household Portfolios",
abstract = "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.",
author = "Tomas Th{\"o}rnqvist and Arna Vardardottir",
note = "CBS Library does not have access to the material; null ; Conference date: 02-05-2014 Through 03-05-2014",
year = "2014",
language = "English",
url = "http://www.sole-jole.org/2014.html",

}

Thörnqvist, T & Vardardottir, A 2014, 'Bargaining over Risk: The Impact of Decision Power on Household Portfolios' Paper presented at, Arlington, VA, United States, 02/05/2014 - 03/05/2014, .

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

2014. Paper presented at The 19th Annual Meetings of the Society of Labour Economists. SOLE 2014, Arlington, VA, United States.

Research output: Contribution to conferencePaperResearchpeer-review

TY - CONF

T1 - Bargaining over Risk

T2 - The Impact of Decision Power on Household Portfolios

AU - Thörnqvist, Tomas

AU - Vardardottir, Arna

N1 - CBS Library does not have access to the material

PY - 2014

Y1 - 2014

N2 - 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.

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.

M3 - Paper

ER -

Thörnqvist T, Vardardottir A. Bargaining over Risk: The Impact of Decision Power on Household Portfolios. 2014. Paper presented at The 19th Annual Meetings of the Society of Labour Economists. SOLE 2014, Arlington, VA, United States.