Stockholding: Participation, Location, and Spillovers
European Central Bank (ECB) - Directorate General Research; Centre for Studies in Economics and Finance (CSEF), University of Naples Federico II; Center for Financial Studies (CFS); ARC Centre of Excellence in Population Ageing Research (CEPAR)
University of Frankfurt; European Central Bank (ECB) - Directorate General Research; Center for Financial Studies (CFS)
Goethe University Frankfurt - Faculty of Economics and Business Administration; Goethe University Frankfurt - Center for Financial Studies (CFS); CEPR; Goethe University Frankfurt - House of Finance
October 18, 2010
Netspar Discussion Paper No. 10/2010-077
This paper provides the first joint analysis of household stockholding participation, location among stockholding modes, and participation spillovers. Our model matches observed participation, conditional and unconditional, and asset location patterns. We find that financial sophistication correlates strongly only with direct stockholding and mutual fund participation, while social interactions mainly influence stockholding through retirement accounts. Whether retirement account owners include7 stocks in them strongly depends on owner characteristics, unlike with mutual fund owners and investment in stock funds. Stockholding is more common among retirement account owners, but mainly because of owner characteristics rather than spillovers from retirement account ownership.
Number of Pages in PDF File: 43
Keywords: Stockholding, Asset Location, Retirement Accounts, Household Finance, Multivariate Probit, Simulated Maximum Likelihood
JEL Classification: G11, E21, D14, C35working papers series
Date posted: December 24, 2010
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