Dispelling the Myth of the Naive Investor During the British Railway Mania, 1845-46

Business History Review (2012) vol 86, no. 1, pp. 3-41

43 Pages Posted: 6 Jan 2015

See all articles by Gareth Campbell

Gareth Campbell

Queen's University Belfast - Queen's Management School; Queen's University Belfast

John D. Turner

Queen's University Belfast; Queen's University Belfast - Queen's Management School

Date Written: January 1, 2012

Abstract

Anecdotal evidence from the British Railway Mania and other historical financial bubbles suggests that many investors during such episodes are naive, thus contributing to the asset price boom. Using extensive investor records, we find that very few investors during the Railway Mania can be categorized as such. Some interpretations of the Mania suggest that naive investors were expropriated by railway insiders, but our evidence is inconsistent with this view as railway insiders contributed substantial amounts of capital, and their investments performed no better than those made by other experienced investors.

Suggested Citation

Campbell, Gareth and Turner, John D., Dispelling the Myth of the Naive Investor During the British Railway Mania, 1845-46 (January 1, 2012). Business History Review (2012) vol 86, no. 1, pp. 3-41, Available at SSRN: https://ssrn.com/abstract=2545200

Gareth Campbell (Contact Author)

Queen's University Belfast - Queen's Management School

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

Queen's University Belfast ( email )

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

John D. Turner

Queen's University Belfast ( email )

David Leir Building
Belfast BT7 1NN, BT9 5AG
Ireland

Queen's University Belfast - Queen's Management School

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

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