Social Interaction in the Family: Evidence from Investors’ Security Holdings

57 Pages Posted: 22 Oct 2016 Last revised: 4 Nov 2021

See all articles by Samuli Knüpfer

Samuli Knüpfer

BI Norwegian Business School; Research Institute of Industrial Economics (IFN)

Elias Henrikki Rantapuska

Aalto University

Matti Sarvimäki

Aalto University - Department of Economics; Government of the Republic of Finland - VATT Institute for Economic Research

Multiple version iconThere are 2 versions of this paper

Date Written: November 4, 2021

Abstract

We show investors tend to hold the same securities as their parents. This intergenerational correlation is stronger for mothers and family members who are more likely to communicate with each other. An instrumental variables estimation and a natural experiment suggest the correlation reflects social influence. This influence runs not only from parents to children, but also vice versa. The resulting holdings of identical securities increase intergenerational correlations in portfolio choice, exacerbate wealth inequality, and amplify the consequences of behavioral biases.

Keywords: social influence, intergenerational correlation, portfolio choice, wealth inequality

JEL Classification: D31, G11, J62

Suggested Citation

Knüpfer, Samuli and Rantapuska, Elias Henrikki and Sarvimäki, Matti, Social Interaction in the Family: Evidence from Investors’ Security Holdings (November 4, 2021). Available at SSRN: https://ssrn.com/abstract=2857053 or http://dx.doi.org/10.2139/ssrn.2857053

Samuli Knüpfer (Contact Author)

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

HOME PAGE: http://www.samuliknupfer.com

Research Institute of Industrial Economics (IFN)

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Elias Henrikki Rantapuska

Aalto University ( email )

P.O. Box 21210
Helsinki, 00101
Finland

Matti Sarvimäki

Aalto University - Department of Economics ( email )

PO Box 1210
FI-00101 Helsinki
Finland

HOME PAGE: http://www.aalto-econ.fi/sarvimaki

Government of the Republic of Finland - VATT Institute for Economic Research ( email )

Arkadiankatu 7
P.O Box 1279
Helsinki, FIN-00531
Finland

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