Cancer and Portfolio Choice: Evidence from Norwegian Register Data

56 Pages Posted: 11 Feb 2020 Last revised: 7 Jun 2021

See all articles by Trond Døskeland

Trond Døskeland

NHH Norwegian School of Economics; affiliation not provided to SSRN

Jens Kvaerner

Tilburg University

Date Written: June 7, 2021

Abstract

We examine the personal investment decisions of 60,000 households following a cancer diagnosis. To create a control group that minimizes the likelihood that the results are confounded by lifestyle factors, we rely on households diagnosed with the same diagnosis but a few years later. Our estimates show that a cancer diagnosis reduces households’ willingness to take risks with their financial wealth. We use the vast heterogeneity among cancers regarding its impact on life expectancy and income to analyze through which channels cancer impact risk-taking. We find that cancers that have a greater impact on life expectancy and income cause a larger reduction in risk-taking. These two channels account for about 40 to 90 percent of the estimated effects of cancer on personal investment decisions. We do not find any association between having dealt with cancer many years ago and current portfolio choices.

Keywords: portfolio choice, health shocks, cancer

JEL Classification: D14, G11

Suggested Citation

Døskeland, Trond and Kvaerner, Jens, Cancer and Portfolio Choice: Evidence from Norwegian Register Data (June 7, 2021). Available at SSRN: https://ssrn.com/abstract=3530698 or http://dx.doi.org/10.2139/ssrn.3530698

Trond Døskeland

NHH Norwegian School of Economics ( email )

Helleveien 30
Bergen, NO-5045
Norway

affiliation not provided to SSRN

Jens Kvaerner (Contact Author)

Tilburg University ( email )

Warandelaan 2
Tilburg, -- 4818HK
Norway
40242704 (Phone)
0364 (Fax)

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

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