Household Search Choice: Theory and Evidence

Bonaparte, Yosef; Fabozzi, Frank J.

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Household Search Choice: Theory and Evidence

Applied Economics, Forthcoming

40 Pages Posted: 13 Mar 2006 Last revised: 10 Apr 2011

See all articles by Yosef Bonaparte

Yosef Bonaparte

University of Colorado at Denver - Department of Finance

Frank J. Fabozzi

Johns Hopkins University - Carey Business School

Date Written: September 28, 2009

Abstract

Since the work by Stigler on the economics of information in the early 1960s, economists have paid closer attention to the role of search for information. However, search methods are not considered in the theory of portfolio choice. We present a model of investor search behavior in order to provide a framework by which to evaluate our empirical evidence on the role of search in portfolio selection and performance. We study two types of search methods: informal and professional. We show that the income, wealth, and risk preference of households influence their search choice.

Keywords: Investment decisions, financial behavior, search and risk behavior, econometrics, sample selection

JEL Classification: D01, D11, D12, D81, D83, G10, G11, G12

Suggested Citation: Suggested Citation

Bonaparte, Yosef and Fabozzi, Frank J., Household Search Choice: Theory and Evidence (September 28, 2009). Applied Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=889446