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Liberalism and Home Equity Bias

Evangelos Benos

University of Illinois at Urbana-Champaign

Marek Jochec


January 9, 2009

Countries whose citizens have liberal ideals are less biased toward domestic equity. Data from 30 countries suggests that economic as well as social liberalism is associated with proportionally higher foreign equity holdings. A one standard deviation increase in the level of economic (social) liberalism relative to time-series and cross-sectional averages, is associated with a 5% (2%) relative decrease of home equity bias. These results hold after controlling for standard rational and behavioral explanations of the home equity bias as well as country and time fixed effects.

Number of Pages in PDF File: 26

Keywords: HEB, home equity bias, liberalism

JEL Classification: G15, G19

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Date posted: January 11, 2009 ; Last revised: May 4, 2009

Suggested Citation

Benos, Evangelos and Jochec, Marek, Liberalism and Home Equity Bias (January 9, 2009). Available at SSRN: http://ssrn.com/abstract=1325857 or http://dx.doi.org/10.2139/ssrn.1325857

Contact Information

Evangelos Benos
University of Illinois at Urbana-Champaign ( email )
601 E John St
Champaign, IL 61820
United States
Marek Jochec (Contact Author)
ISCTE ( email )
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