The Effect of Health and Mortality on Portfolio Choice

57 Pages Posted: 11 Feb 2020 Last revised: 23 Mar 2020

See all articles by Trond Doskeland

Trond Doskeland

Norwegian School of Economics (NHH) - Department of Business and Management Science

Jens Kvaerner

Tilburg University

Date Written: March 20, 2020

Abstract

We analyze portfolio choices of 70,000 households over a period where one in the family gets cancer. We find that a cancer diagnosis reduces risk-taking along the extensive margin. In contrast, having personal experience with cancer many years ago is not associated with the current portfolio choice. Fatal cancers change family composition. Widowhood increases the probability of a stock market exit for the widowed individual by a factor of 16 relative to non-fatal cancers. In line with theory, the relationship between widowhood and subsequent portfolio choice depends on the relative importance of the deceased's human capital.

Keywords: portfolio choice, health shocks, cancer

JEL Classification: D14, G11

Suggested Citation

Doskeland, Trond and Kvaerner, Jens, The Effect of Health and Mortality on Portfolio Choice (March 20, 2020). Available at SSRN: https://ssrn.com/abstract=3530698 or http://dx.doi.org/10.2139/ssrn.3530698

Trond Doskeland

Norwegian School of Economics (NHH) - Department of Business and Management Science ( email )

Helleveien 30
Bergen, NO-5045
Norway

Jens Kvaerner (Contact Author)

Tilburg University ( email )

Warandelaan 2
Tilburg, Noord-Brabant 4818HK
Netherlands
+4740242704 (Phone)

HOME PAGE: http://https://sites.google.com/site/jenskvaerner/

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