Financial Attention

Sicherman, Nachum; Loewenstein, George; Seppi, Duane J.; Utkus, Stephen P.

doi:10.2139/ssrn.2339287

Financial Attention

51 Pages Posted: 13 Oct 2013 Last revised: 30 Jul 2015

See all articles by Nachum Sicherman

Nachum Sicherman

Columbia University; IZA Institute of Labor Economics

George Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences

Duane J. Seppi

Carnegie Mellon University - David A. Tepper School of Business

Stephen P. Utkus

University of Pennsylvania; Center for Financial Markets and Policy, Georgetown University

Date Written: July 29, 2015

Abstract

This paper investigates investor attention using novel panel data on daily online logins for a large sample of retirement accounts. We find support for selective attention to portfolio information. Account logins fall by 9.5% after market declines. Investors also pay less attention when the VIX volatility index is high. The level of attention and the attention/return correlation are strongly related to investor demographics (gender, age) and financial position (wealth, holdings). Using a new statistical decomposition, we also show how aggregate and individual household trading are related to investor attention.

Keywords: Investor Attention, Portfolio Trading, Behavioral Economics/Finance, Ostrich Effect

JEL Classification: G02, D03, D83

Suggested Citation: Suggested Citation

Sicherman, Nachum and Loewenstein, George F. and Seppi, Duane J. and Utkus, Stephen P., Financial Attention (July 29, 2015). Available at SSRN: https://ssrn.com/abstract=2339287 or http://dx.doi.org/10.2139/ssrn.2339287