Do Role Models Affect Risk-Taking Behavior?

47 Pages Posted: 5 Aug 2017 Last revised: 15 Nov 2018

See all articles by Yosef Bonaparte

Yosef Bonaparte

University of Colorado at Denver - Department of Finance

Sarah Khalaf

University of Miami

George M. Korniotis

University of Miami; Miami Business School; University of Miami - Behavioral Decision Making Cluster

Date Written: November 14, 2018

Abstract

We study if the success of role models affect the portfolio decisions of U.S. households. We exploit the election of President Obama as a pseudo natural experiment to examine the affect of role models on the financial decisions of minorities. His political success is a positive experience for minorities that should spur optimism, mitigate perceived risks, enhance trust in the stock market, and encourage investment in financial assets by minorities. Indeed, post-2008 and compared to white Americans, minorities become more risk tolerant, participate more in the stock market, trade more often, invest more in risky assets, and are more willing to save. Overall, our findings suggest that social factors, like the rise of a role model, are important for portfolio decisions.

Keywords: Asset Allocation, Stock Market Participation, Trading, Role Model, PSID, SCF

JEL Classification: J15, J16, D14, G11

Suggested Citation

Bonaparte, Yosef and Khalaf, Sarah and Korniotis, George M., Do Role Models Affect Risk-Taking Behavior? (November 14, 2018). Available at SSRN: https://ssrn.com/abstract=3013905 or http://dx.doi.org/10.2139/ssrn.3013905

Yosef Bonaparte

University of Colorado at Denver - Department of Finance ( email )

United States

Sarah Khalaf

University of Miami ( email )

Coral Gables, FL 33124
United States

George M. Korniotis (Contact Author)

University of Miami ( email )

P.O. Box 248094
Coral Gables, FL 33124-6552
United States
305-284-5728 (Phone)

Miami Business School ( email )

University of Miami - Behavioral Decision Making Cluster ( email )

5250 University Drive
Coral Gables, FL 33124
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
74
rank
312,194
Abstract Views
847
PlumX Metrics