Market Participation and Dividend Clienteles

28 Pages Posted: 25 Mar 2008 Last revised: 20 Mar 2013

Date Written: March 18, 2013


Asset allocation and market participation are intimately related investment decisions. Studies of dividend clienteles attribute the positive relation between age and dividends partially to lack of self-control, but consumers with self-control problems are precisely those less likely to hold securities. Using data from the Consumer Expenditure Survey (CEX), I model market participation and dividend preferences jointly and find evidence of self-selection bias in traditional regressions linking dividend preferences to investors' demographics. Moreover, the positive relation between dividends and age is more likely due to life-cycle considerations rather than to lack of self-control.

Keywords: market participation, dividend clienteles, self-control, CEX

JEL Classification: G10, G19

Suggested Citation

Rossi, Marco, Market Participation and Dividend Clienteles (March 18, 2013). AFA 2009 San Francisco Meetings Paper. Available at SSRN: or

Marco Rossi (Contact Author)

Texas A&M ( email )

360S Wehner
College Station, TX 77843-4218
United States

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