Stock Market Expectations of Dutch Households

38 Pages Posted: 24 Mar 2010

See all articles by Michael D. Hurd

Michael D. Hurd

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

Ludwig Maximilian University of Munich (LMU); CESifo (Center for Economic Studies and Ifo Institute); Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA); Deutsche Bundesbank - Research Department

Multiple version iconThere are 3 versions of this paper

Date Written: November 1, 2009

Abstract

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 these puzzles, 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.

Keywords: subjective probability, stock market participation, survey research

JEL Classification: C42, D12, D84, G11

Suggested Citation

Hurd, Michael D. and van Rooij, Maarten and Winter, Joachim K., Stock Market Expectations of Dutch Households (November 1, 2009). Netspar Discussion Paper No. 11/2009-042, Available at SSRN: https://ssrn.com/abstract=1572373 or http://dx.doi.org/10.2139/ssrn.1572373

Michael D. Hurd (Contact Author)

RAND Corporation ( email )

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State University of New York at Stony Brook - College of Arts and Science - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Maarten van Rooij

De Nederlandsche Bank ( email )

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Joachim K. Winter

Ludwig Maximilian University of Munich (LMU) ( email )

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CESifo (Center for Economic Studies and Ifo Institute) ( email )

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