Individual Investor Behavior: Evidence from the Clients of a Small Credit Cooperative Bank
Enrico Maria Cervellati
University of Bologna - Department of Management
affiliation not provided to SSRN
University of Bologna - Department of Management; University of Bologna - Rimini Center for Economic Analysis (RCEA)
January 1, 2011
International Journal of Behavioural Accounting and Finance, Vol. 2, Nos. 3/4, pp. 191-207, 2011
Individual characteristics are important in explaining investor trading behavior. The clients of a small cooperative bank are analyzed over the three-year period 2005-2007 to measure the effect that age, gender, income, job position and status of online trader has on the number of stock trades completed. A Negative Binomial regression is used since our dependent variable, the number of trades, can only assume non-negative discrete values. This paper shows that the number of transactions increases if the client is: man vs. women; self-employed vs. employee, retiree or housewife; online vs. traditional trader; higher vs. low income. Our findings are not clear cut with respect to age. In conclusion, individual characteristics are important in explaining an individual’s trading behavior since they affect an investor’s attitude towards risk and overconfidence.
Number of Pages in PDF File: 17
Keywords: Behavioral Finance, Overconfidence, Overtrading, Individual Investor Characteristics, Credit Cooperative Banks
JEL Classification: D03, C25, G11
Date posted: February 9, 2012
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