Stock Market Expectations of Dutch Households
Michael D. Hurd
The RAND Corporation; State University of New York at Stony Brook - College of Arts and Science - Department of Economics; National Bureau of Economic Research (NBER)
Maarten Van Rooij
De Nederlandsche Bank; Netspar
Joachim K. Winter
University of Munich
MEA Discussion Paper No. 206-10
Despite its importance for the analysis of life-cycle behavior and, in particular, retirement planning, stock ownership by private households is poorly understood. Among other approaches to investigate this puzzle, recent research has started to elicit private households’ expectations of stock market returns. This paper reports findings from a study that collected data over a two-year period both on households’ stock market expectations (subjective probabilities of gains or losses) and on whether they own stocks. We document substantial heterogeneity in financial market expectations. Expectations are correlated with stock ownership. Over the two years of our data, stock market prices increased, and expectations of future stock market price changes also increased, lending support to the view that expectations are influenced by recent stock gains or losses.
Number of Pages in PDF File: 37
Keywords: Subjective Probability, Stock Market Participation, Survey Research
JEL Classification: C42, D12, D84, G11working papers series
Date posted: October 22, 2010
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