Abstract

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Household Stockholding in Europe: Where Do We Stand, and Where Do We Go?


Luigi Guiso


Einaudi Institute for Economics and Finance (EIEF)

Tullio Jappelli


University of Naples Federico II - Department of Economics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Center for Studies in Economics and Finance - CSEF

Michael Haliassos


Goethe University Frankfurt - Faculty of Economics and Business Administration; Goethe University Frankfurt - Center for Financial Studies (CFS); Goethe University Frankfurt - Research Center SAFE; Goethe University Frankfurt - House of Finance; CEPR

January 2003

CEPR Discussion Paper No. 3694

Abstract:     
We discuss the current state of stock ownership among households in major European countries (France, Germany, Italy, the Netherlands, Sweden and the UK), drawing parallels and contrasts with the US experience. We use detailed microeconomic datasets and explore the extent to which observed international differences in stockholding can be attributed to differences in household characteristics. Statistical analysis finds (1) an increase in stock market participation in all countries; (2) persistent differences across countries, with the US, the UK and Sweden having considerable more participation than France, Germany, Italy; (3) a robust correlation between the participation decision on the one hand, and wealth and education on the other; (4) a relatively small effect of education and wealth on the asset share invested in stocks, conditional on participation. Interestingly, international differences in stock market participation remain large even when we control for household characteristics. As our empirical results point to the relevance of participation costs, we probe into a number of indicators of such costs, and we find that these are consistent with the observed pattern of participation across countries. Since the lowering of such costs brings into the market households with different characteristics than incumbents, we discuss their likely impact, policy concerns, and types of policies that could mitigate their adverse impact on the future workings of the market.

Number of Pages in PDF File: 51

Keywords: Portfolio choice, stock ownership, household finance

JEL Classification: D80, E20, G10

working papers series





Date posted: January 31, 2003  

Suggested Citation

Guiso, Luigi and Jappelli, Tullio and Haliassos, Michael, Household Stockholding in Europe: Where Do We Stand, and Where Do We Go? (January 2003). CEPR Discussion Paper No. 3694. Available at SSRN: http://ssrn.com/abstract=374500

Contact Information

Luigi Guiso
Einaudi Institute for Economics and Finance (EIEF) ( email )
Via Sallustiana 62
Rome, 00187
Italy
+39 06 4792 4858 (Phone)
+39 06 4792 4872 (Fax)
HOME PAGE: http://www.eief.it/faculty-visitors/faculty-a-z/luigi-guiso/
Tullio Jappelli
University of Naples Federico II - Department of Economics ( email )
Via Cintia - Monte S. Angelo
Napoli, 80126
Italy
HOME PAGE: http://www.csef.it/people/jappelli.htm
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
HOME PAGE: http://www.cepr.org/researchers/details/rschcontact.asp?IDENT=106354
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Center for Studies in Economics and Finance - CSEF
84084 Fisciano, Salerno
Italy
+39 089 963 165 (Phone)
+39 089 963 169 (Fax)
HOME PAGE: http://www.csef.it/people/jappelli.htm
Michael Haliassos (Contact Author)
Goethe University Frankfurt - Faculty of Economics and Business Administration ( email )
Grueneburgplatz 1
Frankfurt am Main, D-60323
Germany
Goethe University Frankfurt - Center for Financial Studies (CFS)
Grueneburgplatz 1
Frankfurt am Main, 60323
Germany
HOME PAGE: http://www.ifk-cfs.de
Goethe University Frankfurt - Research Center SAFE ( email )
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
Goethe University Frankfurt - House of Finance
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
CEPR
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
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