Portfolio Choice and Mental Health
Vicki L. Bogan
Angela R. Fertig
University of Georgia
Review of Finance, Forthcoming
Close to 30 percent of the U.S. population experiences at least one mental or substance abuse disorder each year. Given the prevalence of mental health issues, this paper analyzes the role of mental health and cognitive functioning in household portfolio choice decisions. Generally, we find that households affected by mental health issues decrease investments in risky instruments. Various mental health issues can reduce the probability of holding risky assets by up to 19 percent. Moreover, single women diagnosed with psychological disorders increase investments in safe assets. We also find that cognitive functioning issues are associated with an increase in financial assets devoted to retirement accounts.
Number of Pages in PDF File: 44
Keywords: Portfolio choice, mental health, household decisions
JEL Classification: G11, I10Accepted Paper Series
Date posted: November 16, 2009 ; Last revised: February 28, 2012
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