Racial/Ethnic Differences in High Return Investment Ownership: A Decomposition Analysis

16 Pages Posted: 19 Jul 2011

See all articles by Sherman D. Hanna

Sherman D. Hanna

Ohio State University (OSU)

Cong Wang

Convergys Corporation

Yoonkyung Yuh

Ewha Womans University

Multiple version iconThere are 2 versions of this paper

Date Written: 2010

Abstract

The racial/ethnic disparities of risky asset ownership were investigated. In the 2004 and 2007 Survey of Consumer Finances datasets, 30% of Hispanic, 36% of Black, and 65% of White households had high return investments such as stocks, investment real estate, or private business assets. Logistic analysis shows that Black and Hispanic households are much less likely to have high return assets, even after controlling for other factors such as education. However, Blinder-Oaxaca decomposition analyses show that if Black households had the same characteristics, including risk tolerance, as White households, they would have the same ownership rates for high return investments, and the gap between Hispanic and White households is much smaller than implied by standard logistic regression.

Keywords: decomposition analysis, individual investing, portfolio allocation, racial/ethnic differences

JEL Classification: C25, D81, G11, J15

Suggested Citation

Hanna, Sherman D. and Wang, Cong and Yuh, Yoonkyung, Racial/Ethnic Differences in High Return Investment Ownership: A Decomposition Analysis (2010). Journal of Financial Counseling and Planning, Vol. 21, No. 2, pp. 44-59, 2010. Available at SSRN: https://ssrn.com/abstract=1888416

Sherman D. Hanna (Contact Author)

Ohio State University (OSU) ( email )

1787 Neil Avenue
Campbell 265D
Columbus, OH 43210
United States
614-292-4584 (Phone)

Cong Wang

Convergys Corporation ( email )

201 East Fourth Street
Cincinnati, OH 45202-4206
United States

Yoonkyung Yuh

Ewha Womans University ( email )

Shinsegae Building Rm 425
11-1 Daehyun-dong, Seodaemun-gu
Seoul 120-750
Korea
82-2-3277-4076 (Phone)
82-2-3277-2835 (Fax)

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