How Extended Family Mental Health Issues Influence Household Portfolio Allocations

64 Pages Posted: 1 Nov 2018 Last revised: 30 Apr 2021

See all articles by Jermaine Toney

Jermaine Toney

Rutgers University ; Cornell University

Vicki L. Bogan

Duke University; Cornell University

Date Written: March 1, 2019


Growing research links household financial decisions to physical and mental health status within the nuclear family. However, the focus on the nuclear family could underestimate the health-wealth effect. Research also finds that household wealth can decline when an extended family member experiences a physical health shock. We expand current economic modeling to investigate the connection between household portfolio allocations and the mental health of siblings. We hypothesize that mental health issues (psychological distress) outside of the nuclear family unit are a unique contributor to household portfolio allocation decisions. We use panel data and find that having at least one sibling with psychological distress decreases probability of risky asset ownership (stocks, mutual funds), decreases risky assets as a share of financial assets, and decreases total amount of risky asset holding. These results have important implications for understanding the connection between health, portfolio allocation, and wealth building.

Keywords: household finance, portfolio allocation, mental health

JEL Classification: G11, I14

Suggested Citation

Toney, Jermaine and Bogan, Vicki L., How Extended Family Mental Health Issues Influence Household Portfolio Allocations (March 1, 2019). Available at SSRN: or

Jermaine Toney

Rutgers University ( email )

33 Livingston Avenue
New Brunswick, NJ 08901-1982

Cornell University

Warren Hall
Ithaca, NY 14853
United States

Vicki L. Bogan (Contact Author)

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Cornell University ( email )

Warren Hall
Ithaca, NY 14853
United States
607-254-7219 (Phone)

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